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Old Republic International Corporation (NYSE:ORI)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Old Republic International Corporation has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

ORI' s 10-Year Piotroski F-Score Range
Min: 1   Max: 7
Current: 2

1
7

During the past 13 years, the highest Piotroski F-Score of Old Republic International Corporation was 7. The lowest was 1. And the median was 5.


Definition

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 94.7 + 194.4 + 66.1 + 86 = $441 Mil.
Cash Flow from Operations was 227.7 + 135.4 + 36.9 + -542.3 = $-142 Mil.
Revenue was 1331.7 + 1430.5 + 1333.9 + 1390.8 = $5,487 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(16526.4 + 16534.4 + 16811 + 17183.9 + 16986) / 5 = $16808.34 Mil.
Total Assets at the begining of this year (Sep13) was $16,526 Mil.
Long-Term Debt was $965 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.
Net Income was -20.2 + 56.2 + 193.9 + 102.9 = $333 Mil.

Revenue was 1283.3 + 1269.9 + 1461.5 + 1379.5 = $5,394 Mil.
Gross Profit was 0 + 0 + 0 + 0 = $0 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(16187.5 + 16226.8 + 16410.7 + 16299.3 + 16526.4) / 5 = $16330.14 Mil.
Total Assets at the begining of last year (Sep12) was $16,188 Mil.
Long-Term Debt was $569 Mil.
Total Current Assets was $0 Mil.
Total Current Liabilities was $0 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Old Republic International Corporation's current net income (TTM) was 441. ==> Positive ==> Score 1.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by total assets at the beginning of the year.

Score 1 if positive, 0 if negative.

Old Republic International Corporation's current cash flow from operations (TTM) was -142. ==> Negative ==> Score 0.

Q3. Change in Return on Assets

Compare this year’s return on assets (1) to last year’s return on assets.

Score 1 if it’s higher, 0 if it’s lower.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Sep13)
=441.2/16526.4
=0.02669668

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=332.8/16187.5
=0.02055907

Old Republic International Corporation's return on assets of this year was 0.02669668. Old Republic International Corporation's return on assets of last year was 0.02055907. ==> This year is higher. ==> Score 1.

Q4. Quality of Earnings (Accrual)

Compare Cash flow return on assets (2) to return on assets (1)

Score 1 if CFROA > ROA, 0 if CFROA <= ROA.

Old Republic International Corporation's current net income (TTM) was 441. Old Republic International Corporation's current cash flow from operations (TTM) was -142. ==> -142 <= 441 ==> CFROA <= ROA ==> Score 0.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by average total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=965/16808.34
=0.05741198

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=569.2/16330.14
=0.03485579

Old Republic International Corporation's gearing of this year was 0.05741198. Old Republic International Corporation's gearing of last year was 0.03485579. ==> Last year is lower than this year ==> Score 0.

Q6. Change in Working Capital (Liquidity)

Compare this year’s current ratio (current assets divided by current liabilities) to last year’s current ratio.

Score 1 if this year'’s current ratio is higher, 0 if it’s lower

Current Ratio (This Year: Sep14)=Total Current Assets/Total Current Liabilities
=0/0
=

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=0/0
=

Old Republic International Corporation's current ratio of this year was . Old Republic International Corporation's current ratio of last year was . ==> Last year's current ratio is higher ==> Score 0.

Q7. Change in Shares in Issue

Compare the number of shares in issue this year, to the number in issue last year.

Score 0 if there is larger number of shares in issue this year, 1 otherwise.

Old Republic International Corporation's number of shares in issue this year was 295.1. Old Republic International Corporation's number of shares in issue last year was 293.4. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Q8. Change in Gross Margin

Compare this year’s gross margin (gross profit divided by sales) to last year’s.

Score 1 if this year’s gross margin is higher, 0 if it’s lower.

Gross Margin (This Year: TTM)=Gross Profit/Revenue
=0/5486.9
=0

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=0/5394.2
=0

Old Republic International Corporation's gross margin of this year was 0. Old Republic International Corporation's gross margin of last year was 0. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales for the year divided by total assets at the beginning of the year) to last year’s asset turnover ratio.

Score 1 if this year’s asset turnover ratio is higher, 0 if it’s lower

Asset Turnover (This Year)=Revenue (TTM)/Total Assets at the Beginning of This Year (Sep13)
=5486.9/16526.4
=0.33200818

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=5394.2/16187.5
=0.33323243

Old Republic International Corporation's asset turnover of this year was 0.33200818. Old Republic International Corporation's asset turnover of last year was 0.33323243. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+0+1+0+0+0+0+0+0
=2

Good or high score = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Old Republic International Corporation has an F-score of 2. It is a bad or low score, which usually implies poor business operation.


Explanation

The developer of the system is Joseph D. Piotroski is relatively unknown accounting professor who shuns publicity and rarely gives interviews.

He graduated from the University of Illinois with a B.S. in accounting in 1989, received an M.B.A. from Indiana University in 1994. Five years later, in 1999, after earning a Ph.D. in accounting from the University of Michigan, he became an associate professor of accounting at the University of Chicago.

In 2000, he wrote a research paper called "Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers" (pdf).

He wanted to see if he can develop a system (using a simple nine-point scoring system) that can increase the returns of a strategy of investing in low price to book (referred to in the paper as high book to market) value companies.

What he found was something that exceeded his most optimistic expectations.

Buying only those companies that scored highest (8 or 9) on his nine-point scale, or F-Score as he called it, over the 20 year period from 1976 to 1996 led to an average out-performance over the market of 13.4%.

Even more impressive were the results of a strategy of investing in the highest F-Score companies (8 or 9) and shorting companies with the lowest F-Score (0 or 1).

Over the same period from 1976 to 1996 (20 years) this strategy led to an average yearly return of 23%, substantially outperforming the average S&P 500 index return of 15.83% over the same period.


Related Terms

Net Income, Cash Flow from Operations, Revenue, Gross Profit, Total Assets, Long-Term Debt, Total Current Assets, Total Current Liabilities


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Old Republic International Corporation Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111001001
Q2 1111110011
Q3 0100011011
Q4 1111110111
Q5 0111000011
Q6 0000000000
Q7 0001100000
Q8 0000000000
Q9 0100011111
F-score 3645343256

Old Republic International Corporation Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 0100111111
Q2 1111111110
Q3 1111111111
Q4 1111111110
Q5 1111111110
Q6 0000000000
Q7 0100000000
Q8 0000000000
Q9 0011111110
F-score 4655666662
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