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Plains Exploration & Production Company (NYSE:PXP)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Plains Exploration & Production Company has an F-score of 6 indicating the company's financial situation is typical for a stable company.

PXP' s 10-Year Piotroski F-Score Range
Min: 4   Max: 7
Current: 6

4
7

During the past 13 years, the highest Piotroski F-Score of Plains Exploration & Production Company was 7. The lowest was 4. And the median was 6.


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 (Mar13) TTM:Last Year (Mar12) TTM:
Net Income was 22.585 + 191.422 + -43.974 + 223.199 = $393 Mil.
Cash Flow from Operations was 818.723 + 284.214 + 415.621 + 295.545 = $1,814 Mil.
Revenue was 1232.115 + 869.204 + 605.104 + 566.724 = $3,273 Mil.
Gross Profit was 984.972 + 677.82 + 444.707 + 420.46 = $2,528 Mil.
Total Assets at the begining of this year (Mar12) was $9,988 Mil.
Total Assets was $17,190 Mil.
Long-Term Debt was $9,559 Mil.
Total Current Assets was $1,760 Mil.
Total Current Liabilities was $1,069 Mil.
Net Income was -82.319 + 97.704 + -88.296 + 124.892 = $52 Mil.

Revenue was 524.275 + 517.541 + 501.848 + 514.785 = $2,058 Mil.
Gross Profit was 389.868 + 373.977 + 384.098 + 371.646 = $1,520 Mil.
Total Assets at the begining of last year (Mar11) was $9,224 Mil.
Total Assets was $9,988 Mil.
Long-Term Debt was $3,837 Mil.
Total Current Assets was $1,388 Mil.
Total Current Liabilities was $730 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 Exploration & Production Company's current net income was 393. ==> 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 Exploration & Production Company's current cash flow from operations was 1,814. ==> 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.

ROA (This Year)=Net Income/Total Assets at the beginning of this year (Mar12)
=393.232/9988.489
=0.03936852

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar11)
=51.981/9224.033
=0.00563539

Plains Exploration & Production Company's return on assets of this year was 0.03936852. Plains Exploration & Production Company's return on assets of last year was 0.00563539. ==> 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.

Plains Exploration & Production Company's current net income was 393. Plains Exploration & Production Company's current cash flow from operations was 1,814. ==> 1,814 > 393 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=9559.247/17190.374
=0.55608139

Gearing (Last Year)=Long-Term Debt/Total Assets
=3836.551/9988.489
=0.38409723

Plains Exploration & Production Company's gearing of this year was 0.55608139. Plains Exploration & Production Company's gearing of last year was 0.38409723. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=1760.185/1069.451
=1.64587718

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=1387.705/730.29
=1.90021088

Plains Exploration & Production Company's current ratio of this year was 1.64587718. Plains Exploration & Production Company's current ratio of last year was 1.90021088. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Plains Exploration & Production Company's number of shares in issue this year was 132.9. Plains Exploration & Production Company's number of shares in issue last year was 129.3. ==> There is more 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)=Gross Profit/Revenue
=2527.959/3273.147
=0.77233286

Gross Margin (Last Year)=Gross Profit/Revenue
=1519.589/2058.449
=0.73822038

Plains Exploration & Production Company's gross margin of this year was 0.77233286. Plains Exploration & Production Company's gross margin of last year was 0.73822038. ==> This year's gross margin is higher. ==> Score 1.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Mar12)
=3273.147/9988.489
=0.32769191

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar11)
=2058.449/9224.033
=0.2231615

Plains Exploration & Production Company's asset turnover of this year was 0.32769191. Plains Exploration & Production Company's asset turnover of last year was 0.2231615. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+0+0+1+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Plains Exploration & Production Company has an F-score of 6 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 own currency.

Plains Exploration & Production Company Annual Data

Dec03Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12
Q1 1101101111
Q2 1111111111
Q3 1001001011
Q4 1111111111
Q5 1101001000
Q6 0110110110
Q7 0000000001
Q8 1111010111
Q9 1101100111
F-score 7747545677

Plains Exploration & Production Company Quarterly Data

Dec10Mar11Jun11Sep11Dec11Mar12Jun12Sep12Dec12Mar13
Q1 1111111111
Q2 1111111111
Q3 0000100111
Q4 1111111111
Q5 0000000000
Q6 1110111100
Q7 0000111110
Q8 1101111111
Q9 1011111111
F-score 6555877876
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