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Sears Holdings Corporation (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 Corporation 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: 2   Max: 8
Current: 2

2
8

During the past 11 years, the highest Piotroski F-Score of Sears Holdings Corporation was 8. 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 (Jan14) TTM:Last Year (Jan13) TTM:
Net Income was -358 + -534 + -194 + -279 = $-1,365 Mil.
Cash Flow from Operations was 563 + -957 + -2 + -713 = $-1,109 Mil.
Revenue was 10593 + 8272 + 8871 + 8452 = $36,188 Mil.
Gross Profit was 2482 + 1931 + 2186 + 2156 = $8,755 Mil.
Total Assets at the begining of this year (Jan13) was $19,340 Mil.
Total Assets was $18,261 Mil.
Long-Term Debt was $2,834 Mil.
Total Current Assets was $8,959 Mil.
Total Current Liabilities was $8,185 Mil.
Net Income was -489 + -498 + -132 + 189 = $-930 Mil.

Revenue was 12260 + 8857 + 9467 + 9270 = $39,854 Mil.
Gross Profit was 3163 + 2253 + 2531 + 2567 = $10,514 Mil.
Total Assets at the begining of last year (Jan12) was $21,381 Mil.
Total Assets was $19,340 Mil.
Long-Term Debt was $1,943 Mil.
Total Current Assets was $9,265 Mil.
Total Current Liabilities was $8,414 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.

Sears Holdings Corporation's current net income was -1,365. ==> Negative ==> Score 0.

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.

Sears Holdings Corporation's current cash flow from operations was -1,109. ==> 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/Total Assets at the beginning of this year (Jan13)
=-1365/19340
=-0.07057911

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jan12)
=-930/21381
=-0.04349656

Sears Holdings Corporation's return on assets of this year was -0.07057911. Sears Holdings Corporation's return on assets of last year was -0.04349656. ==> 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 Corporation's current net income was -1,365. Sears Holdings Corporation's current cash flow from operations was -1,109. ==> -1,109 > -1,365 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=2834/18261
=0.15519413

Gearing (Last Year)=Long-Term Debt/Total Assets
=1943/19340
=0.10046536

Sears Holdings Corporation's gearing of this year was 0.15519413. Sears Holdings Corporation's gearing of last year was 0.10046536. ==> Last year is lower ==> 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)=Total Current Assets/Total Current Liabilities
=8959/8185
=1.09456323

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=9265/8414
=1.10114096

Sears Holdings Corporation's current ratio of this year was 1.09456323. Sears Holdings Corporation's current ratio of last year was 1.10114096. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Sears Holdings Corporation's number of shares in issue this year was 106.1. Sears Holdings Corporation's number of shares in issue last year was 105.9. ==> There is more 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)=Gross Profit/Revenue
=8755/36188
=0.24193103

Gross Margin (Last Year)=Gross Profit/Revenue
=10514/39854
=0.26381292

Sears Holdings Corporation's gross margin of this year was 0.24193103. Sears Holdings Corporation's gross margin of last year was 0.26381292. ==> Last year's gross margin is higher ==> Score 0.

Q9. Change in asset turnover

Compare this year’s asset turnover (total sales 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/Total Assets at the beginning of this year (Jan13)
=36188/19340
=1.87114788

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jan12)
=39854/21381
=1.86399139

Sears Holdings Corporation's asset turnover of this year was 1.87114788. Sears Holdings Corporation's asset turnover of last year was 1.86399139. ==> 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 Corporation 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


Historical Data

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

Sears Holdings Corporation Annual Data

Jan05Jan06Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14
Q1 1111000
Q2 1111000
Q3 0010010
Q4 1110111
Q5 0110000
Q6 0101000
Q7 1111110
Q8 0010010
Q9 0110011
F-score 4784252

Sears Holdings Corporation Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Q1 0000000000
Q2 0001000000
Q3 0000011110
Q4 1111111111
Q5 1011100000
Q6 0000000010
Q7 1111111000
Q8 0000011000
Q9 0011011111
F-score 3245355342
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