Switch to:
GuruFocus has detected 4 Warning Signs with Plains All American Pipeline LP $PAA.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Plains All American Pipeline LP (NYSE:PAA)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

Plains All American Pipeline LP has an F-score of 5 indicating the company's financial situation is typical for a stable company.

PAA' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 7
Current: 5

3
7

During the past 13 years, the highest Piotroski F-Score of Plains All American Pipeline LP was 7. The lowest was 3. 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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 202 + 101 + 264 + 215 = $782 Mil.
Cash Flow from Operations was 635 + -248 + 255 + 84 = $726 Mil.
Revenue was 4111 + 4950 + 5170 + 5951 = $20,182 Mil.
Gross Profit was 463 + 423 + 452 + 429 = $1,767 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(22288 + 22297 + 23163 + 23507 + 24210) / 5 = $23093 Mil.
Total Assets at the begining of this year (Dec15) was $22,288 Mil.
Long-Term Debt was $10,124 Mil.
Total Current Assets was $4,272 Mil.
Total Current Liabilities was $4,664 Mil.
Net Income was 283 + 124 + 249 + 246 = $902 Mil.

Revenue was 5942 + 6663 + 5551 + 4996 = $23,152 Mil.
Gross Profit was 554 + 398 + 502 + 518 = $1,972 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(22256 + 21724 + 22884 + 22217 + 22288) / 5 = $22273.8 Mil.
Total Assets at the begining of last year (Dec14) was $22,256 Mil.
Long-Term Debt was $10,375 Mil.
Total Current Assets was $2,969 Mil.
Total Current Liabilities was $3,407 Mil.

Profitability

Question 1. 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.

Plains All American Pipeline LP's current net income (TTM) was 782. ==> Positive ==> Score 1.

Question 2. 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.

Plains All American Pipeline LP's current cash flow from operations (TTM) was 726. ==> Positive ==> Score 1.

Question 3. 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.

Plains All American Pipeline LP's return on assets of this year was 0.03508615. Plains All American Pipeline LP's return on assets of last year was 0.0405284. ==> Last year is higher ==> Score 0.

Question 4. 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.

Plains All American Pipeline LP's current net income (TTM) was 782. Plains All American Pipeline LP's current cash flow from operations (TTM) was 726. ==> 726 <= 782 ==> CFROA <= ROA ==> Score 0.

Funding

Question 5. 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=10124/23093
=0.43840125

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=10375/22273.8
=0.46579389

Plains All American Pipeline LP's gearing of this year was 0.43840125. Plains All American Pipeline LP's gearing of last year was 0.46579389. ==> This year is lower or equal to last year. ==> Score 1.

Question 6. 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: Dec16)=Total Current Assets/Total Current Liabilities
=4272/4664
=0.91595197

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=2969/3407
=0.87144115

Plains All American Pipeline LP's current ratio of this year was 0.91595197. Plains All American Pipeline LP's current ratio of last year was 0.87144115. ==> This year's current ratio is higher. ==> Score 1.

Question 7. 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.

Plains All American Pipeline LP's number of shares in issue this year was 466. Plains All American Pipeline LP's number of shares in issue last year was 396. ==> There is larger number of shares in issue this year. ==> Score 0.

Efficiency

Question 8. 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
=1767/20182
=0.08755327

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1972/23152
=0.08517623

Plains All American Pipeline LP's gross margin of this year was 0.08755327. Plains All American Pipeline LP's gross margin of last year was 0.08517623. ==> This year's gross margin is higher. ==> Score 1.

Question 9. 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 (Dec15)
=20182/22288
=0.90550969

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=23152/22256
=1.04025881

Plains All American Pipeline LP's asset turnover of this year was 0.90550969. Plains All American Pipeline LP's asset turnover of last year was 1.04025881. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+0+0+1+1+0+1+0
=5

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

Plains All American Pipeline LP has an F-score of 5 indicating the company's financial situation is typical for a stable company.


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 local exchange's currency.

Plains All American Pipeline LP Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 0110110000
Question 4 1100111110
Question 5 1001101001
Question 6 0011010001
Question 7 0000000000
Question 8 1010110011
Question 9 0101100000
F-score 5555764345

Plains All American Pipeline LP Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 0000000000
Question 4 1111111100
Question 5 0000000011
Question 6 0010000111
Question 7 0000000000
Question 8 0011111111
Question 9 0000000000
F-score 3354444555
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK