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Renewable Energy Group Inc (NAS:REGI)
Piotroski F-Score
4 (As of Today)

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 4 indicating the company's financial situation is typical for a stable company.

REGI' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 7
Current: 4

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 (Jun16) TTM:Last Year (Jun15) TTM:
Net Income was -15.675 + -95.609 + 1.656 + 7.016 = $-103 Mil.
Cash Flow from Operations was 48.774 + -18.897 + 163.286 + -169.826 = $23 Mil.
Revenue was 394.856 + 387.808 + 305.594 + 558.301 = $1,647 Mil.
Gross Profit was 4.405 + 105.659 + 25.108 + 24.862 = $160 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(1153.404 + 1172.227 + 1223.62 + 1224.357 + 1153.49) / 5 = $1185.4196 Mil.
Total Assets at the begining of this year (Jun15) was $1,153 Mil.
Long-Term Debt was $349 Mil.
Total Current Assets was $374 Mil.
Total Current Liabilities was $168 Mil.
Net Income was 4.572 + 69.391 + -38.107 + -2.001 = $34 Mil.

Revenue was 384.258 + 337.615 + 230.918 + 373.762 = $1,327 Mil.
Gross Profit was 22.715 + 111.182 + -16.195 + 15.907 = $134 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(1069.096 + 1055.684 + 1367.736 + 1277.94 + 1153.404) / 5 = $1184.772 Mil.
Total Assets at the begining of last year (Jun14) was $1,069 Mil.
Long-Term Debt was $265 Mil.
Total Current Assets was $298 Mil.
Total Current Liabilities was $122 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 -103. ==> 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 23. ==> 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 (Jun15)
=-102.612/1153.404
=-0.08896449

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=33.855/1069.096
=0.03166694

Renewable Energy Group Inc's return on assets of this year was -0.08896449. Renewable Energy Group Inc's return on assets of last year was 0.03166694. ==> 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 -103. Renewable Energy Group Inc's current cash flow from operations (TTM) was 23. ==> 23 > -103 ==> 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: Jun16)=Long-Term Debt/Average Total Assets from Jun15 to Jun16
=349.349/1185.4196
=0.29470493

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=265.258/1184.772
=0.22388949

Renewable Energy Group Inc's gearing of this year was 0.29470493. Renewable Energy Group Inc's gearing of last year was 0.22388949. ==> 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: Jun16)=Total Current Assets/Total Current Liabilities
=374.489/167.973
=2.2294595

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=298.212/121.607
=2.45226015

Renewable Energy Group Inc's current ratio of this year was 2.2294595. Renewable Energy Group Inc's current ratio of last year was 2.45226015. ==> 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 42.4. Renewable Energy Group Inc's number of shares in issue last year was 43.7. ==> 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
=160.034/1646.559
=0.09719299

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=133.609/1326.553
=0.10071893

Renewable Energy Group Inc's gross margin of this year was 0.09719299. Renewable Energy Group Inc's gross margin of last year was 0.10071893. ==> 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 (Jun15)
=1646.559/1153.404
=1.42756484

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=1326.553/1069.096
=1.24081748

Renewable Energy Group Inc's asset turnover of this year was 1.42756484. Renewable Energy Group Inc's asset turnover of last year was 1.24081748. ==> 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
=0+1+0+1+0+0+1+0+1
=4

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

Renewable Energy Group Inc has an F-score of 4 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.

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

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111000
Question 2 1111111111
Question 3 1100000000
Question 4 1010111111
Question 5 0000011110
Question 6 1100000000
Question 7 0000000011
Question 8 0000011010
Question 9 1100000001
F-score 6532355354
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