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Sempra Energy (NYSE:SRE)
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

Sempra Energy has an F-score of 4 indicating the company's financial situation is typical for a stable company.

SRE' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 4

3
8

During the past 13 years, the highest Piotroski F-Score of Sempra Energy was 8. The lowest was 3. And the median was 6.


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 248 + 369 + 319 + 17 = $953 Mil.
Cash Flow from Operations was 870 + 816 + 592 + 290 = $2,568 Mil.
Revenue was 2481 + 2701 + 2622 + 2156 = $9,960 Mil.
Gross Profit was 1489 + 1752 + 1705 + 1124 = $6,070 Mil.
Average Total Assets from the begining of this year (Jun15)
to the end of this year (Jun16) was
(40006 + 40566 + 41150 + 41835 + 42875) / 5 = $41286.4 Mil.
Total Assets at the begining of this year (Jun15) was $40,006 Mil.
Long-Term Debt was $13,178 Mil.
Total Current Assets was $3,341 Mil.
Total Current Liabilities was $5,680 Mil.
Net Income was 348 + 297 + 437 + 296 = $1,378 Mil.

Revenue was 2815 + 2747 + 2682 + 2367 = $10,611 Mil.
Gross Profit was 1637 + 1611 + 1722 + 1515 = $6,485 Mil.
Average Total Assets from the begining of last year (Jun14)
to the end of last year (Jun15) was
(38307 + 38982 + 39651 + 39551 + 40006) / 5 = $39299.4 Mil.
Total Assets at the begining of last year (Jun14) was $38,307 Mil.
Long-Term Debt was $12,626 Mil.
Total Current Assets was $3,506 Mil.
Total Current Liabilities was $4,399 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.

Sempra Energy's current net income (TTM) was 953. ==> 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.

Sempra Energy's current cash flow from operations (TTM) was 2,568. ==> 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.

Sempra Energy's return on assets of this year was 0.02382143. Sempra Energy's return on assets of last year was 0.03597254. ==> 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.

Sempra Energy's current net income (TTM) was 953. Sempra Energy's current cash flow from operations (TTM) was 2,568. ==> 2,568 > 953 ==> 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
=13178/41286.4
=0.31918501

Gearing (Last Year: Jun15)=Long-Term Debt/Average Total Assets from Jun14 to Jun15
=12626/39299.4
=0.32127717

Sempra Energy's gearing of this year was 0.31918501. Sempra Energy's gearing of last year was 0.32127717. ==> This year is lower or equal to last year. ==> Score 1.

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
=3341/5680
=0.58820423

Current Ratio (Last Year: Jun15)=Total Current Assets/Total Current Liabilities
=3506/4399
=0.79699932

Sempra Energy's current ratio of this year was 0.58820423. Sempra Energy's current ratio of last year was 0.79699932. ==> 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.

Sempra Energy's number of shares in issue this year was 251.9. Sempra Energy's number of shares in issue last year was 251.5. ==> 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
=6070/9960
=0.60943775

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=6485/10611
=0.61115823

Sempra Energy's gross margin of this year was 0.60943775. Sempra Energy's gross margin of last year was 0.61115823. ==> 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)
=9960/40006
=0.24896266

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Jun14)
=10611/38307
=0.27699898

Sempra Energy's asset turnover of this year was 0.24896266. Sempra Energy's asset turnover of last year was 0.27699898. ==> 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+1+0+0+0+0
=4

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

Sempra Energy 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.

Sempra Energy Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1111111111
Question 2 1111111111
Question 3 1011010111
Question 4 1111111111
Question 5 1100000100
Question 6 1000101100
Question 7 0011010000
Question 8 0101011001
Question 9 0000110010
F-score 6556575655

Sempra Energy Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Question 1 1111111111
Question 2 1111111111
Question 3 1111111100
Question 4 1111111111
Question 5 0000011011
Question 6 1110000000
Question 7 0000000000
Question 8 0000111110
Question 9 0011100000
F-score 5565666554
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