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Rose Rock Midstream LP (NYSE:RRMS)
Piotroski F-Score
5 (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 5 indicating the company's financial situation is typical for a stable company.

RRMS' s Piotroski F-Score Range Over the Past 10 Years
Min: 4   Max: 7
Current: 5

4
7

During the past 6 years, the highest Piotroski F-Score of Rose Rock Midstream LP was 7. The lowest was 4. 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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 14.743 + 14.6 + 17.068 + 16.421 = $62.8 Mil.
Cash Flow from Operations was 61.42 + -7.07 + 26.941 + 32.431 = $113.7 Mil.
Revenue was 329.118 + 134.693 + 223.303 + 241.086 = $928.2 Mil.
Gross Profit was 17.675 + 17.505 + 26.514 + 26.761 = $88.5 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(1065.311 + 945.228 + 1171.166 + 1323.838 + 1273.495) / 5 = $1155.8076 Mil.
Total Assets at the begining of this year (Sep14) was $1,065.3 Mil.
Long-Term Debt was $744.5 Mil.
Total Current Assets was $348.6 Mil.
Total Current Liabilities was $270.5 Mil.
Net Income was 6.21 + 12.55 + 11.006 + 16.52 = $46.3 Mil.

Revenue was 252.041 + 292.514 + 292.156 + 376.856 = $1,213.6 Mil.
Gross Profit was 19.467 + 22.762 + 18.973 + 21.08 = $82.3 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(722.739 + 897.247 + 931.389 + 1348.537 + 1065.311) / 5 = $993.0446 Mil.
Total Assets at the begining of last 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.

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.

Rose Rock Midstream LP's current net income (TTM) was 62.8. ==> 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.

Rose Rock Midstream LP's current cash flow from operations (TTM) was 113.7. ==> 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 (Sep14)
=62.832/1065.311
=0.05897996

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=46.286/722.739
=0.06404248

Rose Rock Midstream LP's return on assets of this year was 0.05897996. Rose Rock Midstream LP's return on assets of last year was 0.06404248. ==> 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.

Rose Rock Midstream LP's current net income (TTM) was 62.8. Rose Rock Midstream LP's current cash flow from operations (TTM) was 113.7. ==> 113.7 > 62.8 ==> 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: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=744.468/1155.8076
=0.64411066

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

Rose Rock Midstream LP's gearing of this year was 0.64411066. Rose Rock Midstream LP's gearing of last year was 0.47637135. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=348.645/270.452
=1.2891197

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=389.654/338.923
=1.14968297

Rose Rock Midstream LP's current ratio of this year was 1.2891197. Rose Rock Midstream LP's current ratio of last year was 1.14968297. ==> 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.

Rose Rock Midstream LP's number of shares in issue this year was 36.8. Rose Rock Midstream LP's number of shares in issue last year was 32.8. ==> 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
=88.455/928.2
=0.09529735

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=82.282/1213.567
=0.06780178

Rose Rock Midstream LP's gross margin of this year was 0.09529735. Rose Rock Midstream LP's gross margin of last year was 0.06780178. ==> 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 (Sep14)
=928.2/1065.311
=0.87129486

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=1213.567/722.739
=1.67912206

Rose Rock Midstream LP's asset turnover of this year was 0.87129486. Rose Rock Midstream LP's asset turnover of last year was 1.67912206. ==> 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+1+0+1+0
=5

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

Rose Rock Midstream LP has an F-score of 5 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

Dec12Dec13Dec14
Question 1 111
Question 2 111
Question 3 110
Question 4 111
Question 5 000
Question 6 010
Question 7 000
Question 8 010
Question 9 111
F-score 574

Rose Rock Midstream LP Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Question 1 1111111111
Question 2 1111111111
Question 3 1111000100
Question 4 1011111111
Question 5 0000000010
Question 6 0110100101
Question 7 0000000000
Question 8 1110000011
Question 9 0011111000
F-score 5575544555
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