Switch to:
Sears Holdings Corp (NAS:SHLD)
Piotroski F-Score
2 (As of Today)

Warning Sign:

Piotroski F-Score of 2 is low, which usually implies poor business operation.

The zones of discrimination were as such:

Good or high score = 8 or 9
Bad or low score = 0 or 1

Sears Holdings Corp has an F-score of 2. It is a bad or low score, which usually implies poor business operation.

SHLD' s 10-Year Piotroski F-Score Range
Min: 1   Max: 8
Current: 2

1
8

During the past 11 years, the highest Piotroski F-Score of Sears Holdings Corp was 8. The lowest was 1. 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 (Jul14) TTM:Last Year (Jul13) TTM:
Net Income was -534 + -358 + -402 + -573 = $-1,867 Mil.
Cash Flow from Operations was -957 + 563 + -560 + -187 = $-1,141 Mil.
Revenue was 8272 + 10593 + 7879 + 8013 = $34,757 Mil.
Gross Profit was 1931 + 2482 + 1828 + 1742 = $7,983 Mil.
Average Total Assets from the begining of this year (Jul13)
to the end of this year (Jul14) was
(19278 + 20209 + 18261 + 16930 + 16438) / 5 = $18,223 Mil.
Total Assets was $16,438 Mil.
Long-Term Debt was $2,815 Mil.
Total Current Assets was $8,157 Mil.
Total Current Liabilities was $8,178 Mil.
Net Income was -498 + -489 + -279 + -194 = $-1,460 Mil.

Revenue was 8857 + 12260 + 8452 + 8871 = $38,440 Mil.
Gross Profit was 2253 + 3163 + 2156 + 2186 = $9,758 Mil.
Average Total Assets from the begining of last year (Jul12)
to the end of last year (Jul13) was
(21183 + 21802 + 19340 + 19396 + 19278) / 5 = $20,200 Mil.
Total Assets was $19,278 Mil.
Long-Term Debt was $1,911 Mil.
Total Current Assets was $9,500 Mil.
Total Current Liabilities was $8,960 Mil.

Profitability

Q1. Return on Assets (ROA)

Net income before extraordinary items for the year divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Sears Holdings Corp's current net income (ttm) was -1,867. ==> Negative ==> Score 0.

Q2. Cash Flow Return on Assets (CFROA)

Net cash flow from operating activities (operating cash flow) divided by average total assets throughout the year.

Score 1 if positive, 0 if negative.

Sears Holdings Corp's current cash flow from operations (ttm) was -1,141. ==> Negative ==> Score 0.

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)/Average Total Assets from Jul13 to Jul14
=-1867/18223.2
=-0.10245182

ROA (Last Year)=Net Income (TTM)/Average Total Assets from Jul12 to Jul13
=-1460/20199.8
=-0.07227794

Sears Holdings Corp's return on assets of this year was -0.10245182. Sears Holdings Corp's return on assets of last year was -0.07227794. ==> 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.

Sears Holdings Corp's current net income (ttm) was -1,867. Sears Holdings Corp's current cash flow from operations (ttm) was -1,141. ==> -1,141 > -1,867 ==> CFROA > ROA ==> Score 1.

Funding

Q5. Change in Gearing or Leverage

Compare this year’s gearing (long-term debt divided by total assets) to last year’s gearing.

Score 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year: Jul14)=Long-Term Debt/Total Assets
=2815/16438
=0.17124954

Gearing (Last Year: Jul13)=Long-Term Debt/Total Assets
=1911/19278
=0.09912854

Sears Holdings Corp's gearing of this year was 0.17124954. Sears Holdings Corp's gearing of last year was 0.09912854. ==> 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: Jul14)=Total Current Assets/Total Current Liabilities
=8157/8178
=0.99743213

Current Ratio (Last Year: Jul13)=Total Current Assets/Total Current Liabilities
=9500/8960
=1.06026786

Sears Holdings Corp's current ratio of this year was 0.99743213. Sears Holdings Corp's current ratio of last year was 1.06026786. ==> 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.

Sears Holdings Corp's number of shares in issue this year was 106.3. Sears Holdings Corp's number of shares in issue last year was 106.1. ==> 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
=7983/34757
=0.22968035

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=9758/38440
=0.25385016

Sears Holdings Corp's gross margin of this year was 0.22968035. Sears Holdings Corp's gross margin of last year was 0.25385016. ==> 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 average total assets throughout 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)/Average Total Assets from Jul13 to Jul14
=34757/18223.2
=1.907294

Asset Turnover (Last Year)=Revenue (TTM)/Average Total Assets from Jul12 to Jul13
=38440/20199.8
=1.90298914

Sears Holdings Corp's asset turnover of this year was 1.907294. Sears Holdings Corp's asset turnover of last year was 1.90298914. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=0+0+0+1+0+0+0+0+1
=2

Good or high score = 8 or 9

Bad or low score = 0 or 1

Sears Holdings Corp has an F-score of 2. 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, Altman Z-Score, Beneish M-Score


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Sears Holdings Corp Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111000
Q2 1111000
Q3 0010010
Q4 1110111
Q5 0110000
Q6 0101000
Q7 1111110
Q8 0010010
Q9 0000000
F-score 4674241

Sears Holdings Corp Quarterly Data

Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14Apr14Jul14
Q1 0000000000
Q2 0100000000
Q3 0001111000
Q4 1111111111
Q5 1110000000
Q6 0000001000
Q7 1111100000
Q8 0001100000
Q9 1111111011
F-score 4545534122
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)
Free 7-day Trial
FEEDBACK