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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 10-Year Piotroski F-Score Range
Min: 2   Max: 7
Current: 3

2
7

During the past 7 years, the highest Piotroski F-Score of Renewable Energy Group Inc was 7. The lowest was 2. 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 (Mar15) TTM:Last Year (Mar14) TTM:
Net Income was 11.007 + 4.572 + 69.391 + -38.107 = $47 Mil.
Cash Flow from Operations was -0.647 + 47.181 + -38.826 + 164.022 = $172 Mil.
Revenue was 332.918 + 384.258 + 337.615 + 230.918 = $1,286 Mil.
Gross Profit was 15.151 + 22.715 + 111.182 + -16.195 = $133 Mil.
Average Total Assets from the begining of this year (Mar14)
to the end of this year (Mar15) was
(755.368 + 1069.096 + 1055.684 + 1372.888 + 1277.94) / 5 = $1106.1952 Mil.
Total Assets at the begining of this year (Mar14) was $755 Mil.
Long-Term Debt was $266 Mil.
Total Current Assets was $428 Mil.
Total Current Liabilities was $238 Mil.
Net Income was 23.13 + 86.703 + 30.13 + -2.359 = $138 Mil.

Revenue was 384.735 + 458.444 + 390.591 + 219.04 = $1,453 Mil.
Gross Profit was 50.181 + 57.849 + 44.708 + 11.564 = $164 Mil.
Average Total Assets from the begining of last year (Mar13)
to the end of last year (Mar14) was
(685.697 + 640.763 + 685.794 + 740.855 + 755.368) / 5 = $701.6954 Mil.
Total Assets at the begining of last year (Mar13) was $686 Mil.
Long-Term Debt was $33 Mil.
Total Current Assets was $291 Mil.
Total Current Liabilities was $76 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 47. ==> 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.

Renewable Energy Group Inc's current cash flow from operations (TTM) was 172. ==> 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 (Mar14)
=46.863/755.368
=0.06203996

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=137.604/685.697
=0.20067756

Renewable Energy Group Inc's return on assets of this year was 0.06203996. Renewable Energy Group Inc's return on assets of last year was 0.20067756. ==> 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 47. Renewable Energy Group Inc's current cash flow from operations (TTM) was 172. ==> 172 > 47 ==> 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: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=265.743/1106.1952
=0.24023156

Gearing (Last Year: Mar14)=Long-Term Debt/Average Total Assets from Mar13 to Mar14
=33.179/701.6954
=0.04728405

Renewable Energy Group Inc's gearing of this year was 0.24023156. Renewable Energy Group Inc's gearing of last year was 0.04728405. ==> Last year is lower than this year ==> Score 0.

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: Mar15)=Total Current Assets/Total Current Liabilities
=427.659/237.865
=1.79790638

Current Ratio (Last Year: Mar14)=Total Current Assets/Total Current Liabilities
=290.576/75.89
=3.82891026

Renewable Energy Group Inc's current ratio of this year was 1.79790638. Renewable Energy Group Inc's current ratio of last year was 3.82891026. ==> 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 44.4. Renewable Energy Group Inc's number of shares in issue last year was 38.6. ==> 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
=132.853/1285.709
=0.10333054

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=164.302/1452.81
=0.11309256

Renewable Energy Group Inc's gross margin of this year was 0.10333054. Renewable Energy Group Inc's gross margin of last year was 0.11309256. ==> 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 (Mar14)
=1285.709/755.368
=1.7020962

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar13)
=1452.81/685.697
=2.11873466

Renewable Energy Group Inc's asset turnover of this year was 1.7020962. Renewable Energy Group Inc's asset turnover of last year was 2.11873466. ==> 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+1+0+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

Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 111
Question 2 111
Question 3 010
Question 4 100
Question 5 110
Question 6 100
Question 7 010
Question 8 010
Question 9 010
F-score 572

Renewable Energy Group Inc Quarterly Data

Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15
Question 1 1111111111
Question 2 1111111111
Question 3 0001111000
Question 4 1010010101
Question 5 1111100000
Question 6 1001011000
Question 7 0000000000
Question 8 0001100000
Question 9 0001111000
F-score 5347665323
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