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Rose Rock Midstream LP (NYSE:RRMS)
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

Rose Rock Midstream LP has an F-score of 4 indicating the company's financial situation is typical for a stable company.

RRMS' s 10-Year Piotroski F-Score Range
Min: 3   Max: 7
Current: 4

3
7

During the past 5 years, the highest Piotroski F-Score of Rose Rock Midstream LP was 7. The lowest was 3. 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 (Sep14) TTM:Last Year (Sep13) TTM:
Net Income was 6.21 + 12.483 + 11.048 + 16.493 = $46.2 Mil.
Cash Flow from Operations was 50.36 + 18.388 + 5.669 + 20.301 = $94.7 Mil.
Revenue was 252.041 + 290.923 + 290.432 + 374.945 = $1,208.3 Mil.
Gross Profit was 19.467 + 21.508 + 17.681 + 19.667 = $78.3 Mil.
Average Total Assets from the begining of this year (Sep13)
to the end of this year (Sep14) was
(722.739 + 897.247 + 931.389 + 1348.537 + 1065.311) / 5 = $993.0446 Mil.
Total Assets at the begining of this year (Sep13) was $722.7 Mil.
Long-Term Debt was $473.1 Mil.
Total Current Assets was $389.7 Mil.
Total Current Liabilities was $338.9 Mil.
Net Income was 4.601 + 11.994 + 9.134 + 9.411 = $35.1 Mil.

Revenue was 151.73 + 171.232 + 161.422 + 181.831 = $666.2 Mil.
Gross Profit was 11.455 + 17.363 + 15.109 + 15.033 = $59.0 Mil.
Average Total Assets from the begining of last year (Sep12)
to the end of last year (Sep13) was
(537.551 + 544.726 + 613.619 + 616.758 + 722.739) / 5 = $607.0786 Mil.
Total Assets at the begining of last year (Sep12) was $537.6 Mil.
Long-Term Debt was $85.0 Mil.
Total Current Assets was $294.3 Mil.
Total Current Liabilities was $254.5 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.

Rose Rock Midstream LP's current net income (TTM) was 46.2. ==> 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.

Rose Rock Midstream LP's current cash flow from operations (TTM) was 94.7. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Sep13)
=46.234/722.739
=0.06397053

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=35.14/537.551
=0.06537054

Rose Rock Midstream LP's return on assets of this year was 0.06397053. Rose Rock Midstream LP's return on assets of last year was 0.06537054. ==> Last year is higher ==> Score 0.

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.

Rose Rock Midstream LP's current net income (TTM) was 46.2. Rose Rock Midstream LP's current cash flow from operations (TTM) was 94.7. ==> 94.7 > 46.2 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=473.058/993.0446
=0.47637135

Gearing (Last Year: Sep13)=Long-Term Debt/Average Total Assets from Sep12 to Sep13
=85.043/607.0786
=0.14008565

Rose Rock Midstream LP's gearing of this year was 0.47637135. Rose Rock Midstream LP's gearing of last year was 0.14008565. ==> Last year is lower than this year ==> 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: Sep14)=Total Current Assets/Total Current Liabilities
=389.654/338.923
=1.14968297

Current Ratio (Last Year: Sep13)=Total Current Assets/Total Current Liabilities
=294.3/254.491
=1.15642596

Rose Rock Midstream LP's current ratio of this year was 1.14968297. Rose Rock Midstream LP's current ratio of last year was 1.15642596. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

Rose Rock Midstream LP's number of shares in issue this year was 20.6. Rose Rock Midstream LP's number of shares in issue last year was 13.5. ==> There is larger 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: TTM)=Gross Profit/Revenue
=78.323/1208.341
=0.06481862

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=58.96/666.215
=0.08849996

Rose Rock Midstream LP's gross margin of this year was 0.06481862. Rose Rock Midstream LP's gross margin of last year was 0.08849996. ==> Last year's gross margin is higher ==> Score 0.

Q9. 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 (Sep13)
=1208.341/722.739
=1.67189124

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep12)
=666.215/537.551
=1.23935217

Rose Rock Midstream LP's asset turnover of this year was 1.67189124. Rose Rock Midstream LP's asset turnover of last year was 1.23935217. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+0+0+0+1
=4

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

Rose Rock Midstream LP 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.

Rose Rock Midstream LP Annual Data

Dec09Dec10Dec11Dec12Dec13
Q1 1
Q2 1
Q3 1
Q4 1
Q5 0
Q6 1
Q7 0
Q8 1
Q9 1
F-score 7

Rose Rock Midstream LP Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
Q1 1111111
Q2 1111111
Q3 0101100
Q4 1101111
Q5 0000000
Q6 0011010
Q7 0000000
Q8 0111000
Q9 0001111
F-score 0003547554
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