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Plains All American Pipeline LP (NYSE:PAA)
Piotroski F-Score
3 (As of Today)

Warning Sign:

Piotroski F-Score of 3 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

Plains All American Pipeline LP has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

PAA' s 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 3

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 own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 309 + 384 + 287 + 323 = $1,303 Mil.
Cash Flow from Operations was 360 + 822 + 141 + 315 = $1,638 Mil.
Revenue was 10632 + 11684 + 11195 + 11127 = $44,638 Mil.
Gross Profit was 588 + 678 + 555 + 579 = $2,400 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(20267 + 20360 + 20702 + 21495 + 21837) / 5 = $20932.2 Mil.
Total Assets at the begining of this year (Sep13) was $20,267 Mil.
Long-Term Debt was $7,613 Mil.
Total Current Assets was $5,160 Mil.
Total Current Liabilities was $5,568 Mil.
Net Income was 320 + 528 + 292 + 231 = $1,371 Mil.

Revenue was 9439 + 10620 + 10295 + 10703 = $41,057 Mil.
Gross Profit was 606 + 843 + 565 + 468 = $2,482 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(18187 + 19235 + 19440 + 19424 + 20267) / 5 = $19310.6 Mil.
Total Assets at the begining of last year (Sep12) was $18,187 Mil.
Long-Term Debt was $7,018 Mil.
Total Current Assets was $5,145 Mil.
Total Current Liabilities was $5,011 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.

Plains All American Pipeline LP's current net income (TTM) was 1,303. ==> 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.

Plains All American Pipeline LP's current cash flow from operations (TTM) was 1,638. ==> Positive ==> Score 1.

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.

Plains All American Pipeline LP's return on assets of this year was 0.06429171. Plains All American Pipeline LP's return on assets of last year was 0.07538352. ==> Last year is higher ==> Score 0.

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.

Plains All American Pipeline LP's current net income (TTM) was 1,303. Plains All American Pipeline LP's current cash flow from operations (TTM) was 1,638. ==> 1,638 > 1,303 ==> CFROA > ROA ==> Score 1.

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
=7613/20932.2
=0.36369803

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=7018/19310.6
=0.36342734

Plains All American Pipeline LP's gearing of this year was 0.36369803. Plains All American Pipeline LP's gearing of last year was 0.36342734. ==> 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
=5160/5568
=0.92672414

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=5145/5011
=1.02674117

Plains All American Pipeline LP's current ratio of this year was 0.92672414. Plains All American Pipeline LP's current ratio of last year was 1.02674117. ==> 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.

Plains All American Pipeline LP's number of shares in issue this year was 371. Plains All American Pipeline LP's number of shares in issue last year was 345. ==> 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
=2400/44638
=0.05376585

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2482/41057
=0.06045254

Plains All American Pipeline LP's gross margin of this year was 0.05376585. Plains All American Pipeline LP's gross margin of last year was 0.06045254. ==> 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)
=44638/20267
=2.20249667

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=41057/18187
=2.25749161

Plains All American Pipeline LP's asset turnover of this year was 2.20249667. Plains All American Pipeline LP's asset turnover of last year was 2.25749161. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+0+0+0
=3

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 3. 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.

Plains All American Pipeline LP Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1101111111
Q3 1110110110
Q4 0001100111
Q5 0101001101
Q6 1110011010
Q7 0000000000
Q8 0011010110
Q9 1000101100
F-score 5545555764

Plains All American Pipeline LP Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111111
Q2 1111111111
Q3 1111010000
Q4 1111111111
Q5 1001101100
Q6 0011110000
Q7 0000000000
Q8 1111110000
Q9 1100000010
F-score 7667664443
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