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Renewable Energy Group Inc (NAS:REGI)
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

Renewable Energy Group Inc has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

REGI' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 3

2
7

During the past 8 years, the highest Piotroski F-Score of Renewable Energy Group Inc was 7. The lowest was 2. 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 (Dec15) TTM:Last Year (Dec14) TTM:
Net Income was -38.107 + -2.001 + -15.675 + -95.609 = $-151 Mil.
Cash Flow from Operations was 164.022 + -113.739 + 48.774 + -18.897 = $80 Mil.
Revenue was 230.918 + 373.762 + 394.856 + 387.808 = $1,387 Mil.
Gross Profit was -16.195 + 15.907 + 4.405 + 105.659 = $110 Mil.
Average Total Assets from the begining of this year (Dec14)
to the end of this year (Dec15) was
(1367.736 + 1277.94 + 1153.404 + 1172.227 + 1223.62) / 5 = $1238.9854 Mil.
Total Assets at the begining of this year (Dec14) was $1,368 Mil.
Long-Term Debt was $265 Mil.
Total Current Assets was $476 Mil.
Total Current Liabilities was $294 Mil.
Net Income was -2.359 + 11.007 + 4.572 + 69.391 = $83 Mil.

Revenue was 219.04 + 332.918 + 384.258 + 337.615 = $1,274 Mil.
Gross Profit was 11.564 + 15.151 + 22.715 + 111.182 = $161 Mil.
Average Total Assets from the begining of last year (Dec13)
to the end of last year (Dec14) was
(740.855 + 755.368 + 1069.096 + 1055.684 + 1367.736) / 5 = $997.7478 Mil.
Total Assets at the begining of last year (Dec13) was $741 Mil.
Long-Term Debt was $261 Mil.
Total Current Assets was $528 Mil.
Total Current Liabilities was $285 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.

Renewable Energy Group Inc's current net income (TTM) was -151. ==> Negative ==> Score 0.

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.

Renewable Energy Group Inc's current cash flow from operations (TTM) was 80. ==> 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.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Dec14)
=-151.392/1367.736
=-0.11068803

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=82.611/740.855
=0.11150765

Renewable Energy Group Inc's return on assets of this year was -0.11068803. Renewable Energy Group Inc's return on assets of last year was 0.11150765. ==> 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.

Renewable Energy Group Inc's current net income (TTM) was -151. Renewable Energy Group Inc's current cash flow from operations (TTM) was 80. ==> 80 > -151 ==> CFROA > ROA ==> Score 1.

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: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=264.594/1238.9854
=0.213557

Gearing (Last Year: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=261.201/997.7478
=0.2617906

Renewable Energy Group Inc's gearing of this year was 0.213557. Renewable Energy Group Inc's gearing of last year was 0.2617906. ==> 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: Dec15)=Total Current Assets/Total Current Liabilities
=475.584/293.971
=1.61779223

Current Ratio (Last Year: Dec14)=Total Current Assets/Total Current Liabilities
=528.443/285.311
=1.85216483

Renewable Energy Group Inc's current ratio of this year was 1.61779223. Renewable Energy Group Inc's current ratio of last year was 1.85216483. ==> Last year's current ratio is higher ==> Score 0.

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.

Renewable Energy Group Inc's number of shares in issue this year was 44. Renewable Energy Group Inc's number of shares in issue last year was 40.8. ==> 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
=109.776/1387.344
=0.07912673

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=160.612/1273.831
=0.1260858

Renewable Energy Group Inc's gross margin of this year was 0.07912673. Renewable Energy Group Inc's gross margin of last year was 0.1260858. ==> Last year's gross margin is higher ==> Score 0.

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 (Dec14)
=1387.344/1367.736
=1.0143361

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec13)
=1273.831/740.855
=1.71940663

Renewable Energy Group Inc's asset turnover of this year was 1.0143361. Renewable Energy Group Inc's asset turnover of last year was 1.71940663. ==> 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
=0+1+0+1+1+0+0+0+0
=3

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

Renewable Energy Group Inc 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.

Renewable Energy Group Inc Annual Data

Dec11Dec12Dec13Dec14Dec15
Question 1 11110
Question 2 11111
Question 3 10100
Question 4 01001
Question 5 11101
Question 6 11000
Question 7 00100
Question 8 10100
Question 9 10100
F-score 75723

Renewable Energy Group Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
Question 1 1111111110
Question 2 1111111111
Question 3 1111000000
Question 4 0010101111
Question 5 1100000111
Question 6 1011000000
Question 7 0100000000
Question 8 1100000110
Question 9 1111000000
F-score 7765323553
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