Switch to:
GuruFocus has detected 6 Warning Signs with Renewable Energy Group Inc $REGI.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Renewable Energy Group Inc (NAS:REGI)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, indicating very healthy situation.

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 9. It is a good or high score, which usually indicates a very healthy situation.

REGI' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 9

2
9

During the past 9 years, the highest Piotroski F-Score of Renewable Energy Group Inc was 9. 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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was 1.656 + 7.016 + 23.442 + 20.197 = $52 Mil.
Cash Flow from Operations was 163.286 + -169.826 + 77.678 + 4.165 = $75 Mil.
Revenue was 305.594 + 558.301 + 624.64 + 560.421 = $2,049 Mil.
Gross Profit was 25.108 + 24.862 + 47.348 + 81.92 = $179 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(1223.62 + 1224.357 + 1153.49 + 1020.114 + 1136.603) / 5 = $1151.6368 Mil.
Total Assets at the begining of this year (Dec15) was $1,224 Mil.
Long-Term Debt was $239 Mil.
Total Current Assets was $463 Mil.
Total Current Liabilities was $234 Mil.
Net Income was -38.107 + -2.001 + -15.675 + -95.609 = $-151 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 last year (Dec14)
to the end of last year (Dec15) was
(1367.736 + 1277.94 + 1153.404 + 1172.227 + 1223.62) / 5 = $1238.9854 Mil.
Total Assets at the begining of last year (Dec14) was $1,368 Mil.
Long-Term Debt was $265 Mil.
Total Current Assets was $476 Mil.
Total Current Liabilities was $294 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 52. ==> 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 75. ==> 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 (Dec15)
=52.311/1223.62
=0.04275102

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

Renewable Energy Group Inc's return on assets of this year was 0.04275102. Renewable Energy Group Inc's return on assets of last year was -0.11068803. ==> This year is higher. ==> Score 1.

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 52. Renewable Energy Group Inc's current cash flow from operations (TTM) was 75. ==> 75 > 52 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=238.818/1151.6368
=0.20737267

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

Renewable Energy Group Inc's gearing of this year was 0.20737267. Renewable Energy Group Inc's gearing of last year was 0.213557. ==> 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
=462.839/233.545
=1.98179794

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=475.584/293.971
=1.61779223

Renewable Energy Group Inc's current ratio of this year was 1.98179794. Renewable Energy Group Inc's current ratio of last year was 1.61779223. ==> 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.

Renewable Energy Group Inc's number of shares in issue this year was 40.9. Renewable Energy Group Inc's number of shares in issue last year was 44. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=179.238/2048.956
=0.08747772

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=109.776/1387.344
=0.07912673

Renewable Energy Group Inc's gross margin of this year was 0.08747772. Renewable Energy Group Inc's gross margin of last year was 0.07912673. ==> 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)
=2048.956/1223.62
=1.67450352

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=1387.344/1367.736
=1.0143361

Renewable Energy Group Inc's asset turnover of this year was 1.67450352. Renewable Energy Group Inc's asset turnover of last year was 1.0143361. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

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

Renewable Energy Group Inc has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.


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.

Renewable Energy Group Inc Annual Data

Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 111101
Question 2 111111
Question 3 101001
Question 4 010011
Question 5 111011
Question 6 110001
Question 7 001001
Question 8 101001
Question 9 101001
F-score 757239

Renewable Energy Group Inc Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111100001
Question 2 1111111111
Question 3 0000000001
Question 4 1011111111
Question 5 0001111011
Question 6 0000000011
Question 7 0000001111
Question 8 0001101011
Question 9 0000000111
F-score 3235535479
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