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Sempra Energy (NYSE:SRE)
Piotroski F-Score
5 (As of Today)

The zones of discrimination were as such:

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

Sempra Energy has an F-score of 5 indicating the company's financial situation is typical for a stable company.

SRE' s 10-Year Piotroski F-Score Range
Min: 3   Max: 8
Current: 5

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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 270 + 247 + 282 + 301 = $1,100 Mil.
Cash Flow from Operations was 130 + 904 + 454 + 225 = $1,713 Mil.
Revenue was 2678 + 2795 + 2705 + 2551 = $10,729 Mil.
Gross Profit was 1544 + 1489 + 1626 + 1586 = $6,245 Mil.
Total Assets at the begining of this year (Jun13) was $37,020 Mil.
Total Assets was $38,307 Mil.
Long-Term Debt was $12,323 Mil.
Total Current Assets was $4,195 Mil.
Total Current Liabilities was $3,882 Mil.
Net Income was 246 + 180 + 294 + 270 = $990 Mil.

Revenue was 2651 + 2650 + 2668 + 2507 = $10,476 Mil.
Gross Profit was 1666 + 1488 + 1557 + 1601 = $6,312 Mil.
Total Assets at the begining of last year (Jun12) was $34,202 Mil.
Total Assets was $37,020 Mil.
Long-Term Debt was $10,530 Mil.
Total Current Assets was $3,661 Mil.
Total Current Liabilities was $4,725 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.

Sempra Energy's current net income was 1,100. ==> 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.

Sempra Energy's current cash flow from operations was 1,713. ==> 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/Total Assets at the beginning of this year (Jun13)
=1100/37020
=0.02971367

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=990/34202
=0.02894568

Sempra Energy's return on assets of this year was 0.02971367. Sempra Energy's return on assets of last year was 0.02894568. ==> This year is higher. ==> Score 1.

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.

Sempra Energy's current net income was 1,100. Sempra Energy's current cash flow from operations was 1,713. ==> 1,713 > 1,100 ==> 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)=Long-Term Debt/Total Assets
=12323/38307
=0.32169055

Gearing (Last Year)=Long-Term Debt/Total Assets
=10530/37020
=0.28444084

Sempra Energy's gearing of this year was 0.32169055. Sempra Energy's gearing of last year was 0.28444084. ==> 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)=Total Current Assets/Total Current Liabilities
=4195/3882
=1.08062854

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=3661/4725
=0.77481481

Sempra Energy's current ratio of this year was 1.08062854. Sempra Energy's current ratio of last year was 0.77481481. ==> This year's current ratio is higher. ==> Score 1.

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.

Sempra Energy's number of shares in issue this year was 250.1. Sempra Energy's number of shares in issue last year was 248.5. ==> 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)=Gross Profit/Revenue
=6245/10729
=0.58206729

Gross Margin (Last Year)=Gross Profit/Revenue
=6312/10476
=0.60252005

Sempra Energy's gross margin of this year was 0.58206729. Sempra Energy's gross margin of last year was 0.60252005. ==> 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 (Jun13)
=10729/37020
=0.28981632

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=10476/34202
=0.30629788

Sempra Energy's asset turnover of this year was 0.28981632. Sempra Energy's asset turnover of last year was 0.30629788. ==> Last year's asset turnover is higher ==> Score 0.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+1+1+0+1+0+0+0
=5

Good or high score = 8 or 9

Bad or low score = 0 or 1

Sempra Energy 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.

Sempra Energy Annual Data

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 1111111111
Q2 1111111111
Q3 1010110101
Q4 1011111111
Q5 0110000001
Q6 1110001011
Q7 0000110100
Q8 1100010110
Q9 1100001101
F-score 7663565757

Sempra Energy Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1000011111
Q4 1111111111
Q5 0100111100
Q6 0001111111
Q7 0000000100
Q8 0111100000
Q9 1000011100
F-score 5545677855
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