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STMicroelectronics NV (NYSE:STM)
Piotroski F-Score
6 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, indicating very healthy situation.

The zones of discrimination were as such:

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

STMicroelectronics NV has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

STM' s 10-Year Piotroski F-Score Range
Min: 3   Max: 9
Current: 6

3
9

During the past 13 years, the highest Piotroski F-Score of STMicroelectronics NV was 9. 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 (Dec14) TTM:Last Year (Dec13) TTM:
Net Income was 0 + 0 + 72 + 43 = $115 Mil.
Cash Flow from Operations was 53 + 262 + 89 + 311 = $715 Mil.
Revenue was 0 + 0 + 1886 + 1829 = $3,715 Mil.
Gross Profit was 0 + 0 + 646 + 619 = $1,265 Mil.
Average Total Assets from the begining of this year (Dec13)
to the end of this year (Dec14) was
(9173 + 9017 + 9986 + 9411 + 9008) / 5 = $9319 Mil.
Total Assets at the begining of this year (Dec13) was $9,173 Mil.
Long-Term Debt was $1,603 Mil.
Total Current Assets was $5,051 Mil.
Total Current Liabilities was $1,766 Mil.
Net Income was -171 + -152 + -142 + -36 = $-501 Mil.

Revenue was 2009 + 2045 + 2013 + 2015 = $8,082 Mil.
Gross Profit was 628 + 672 + 652 + 662 = $2,614 Mil.
Average Total Assets from the begining of last year (Dec12)
to the end of last year (Dec13) was
(10434 + 9632 + 9643 + 9324 + 9173) / 5 = $9641.2 Mil.
Total Assets at the begining of last year (Dec12) was $10,434 Mil.
Long-Term Debt was $928 Mil.
Total Current Assets was $4,807 Mil.
Total Current Liabilities was $1,993 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.

STMicroelectronics NV's current net income (TTM) was 115. ==> 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.

STMicroelectronics NV's current cash flow from operations (TTM) was 715. ==> 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.

STMicroelectronics NV's return on assets of this year was 0.01253679. STMicroelectronics NV's return on assets of last year was -0.0480161. ==> This year is higher. ==> Score 1.

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.

STMicroelectronics NV's current net income (TTM) was 115. STMicroelectronics NV's current cash flow from operations (TTM) was 715. ==> 715 > 115 ==> 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: Dec14)=Long-Term Debt/Average Total Assets from Dec13 to Dec14
=1603/9319
=0.17201416

Gearing (Last Year: Dec13)=Long-Term Debt/Average Total Assets from Dec12 to Dec13
=928/9641.2
=0.09625358

STMicroelectronics NV's gearing of this year was 0.17201416. STMicroelectronics NV's gearing of last year was 0.09625358. ==> 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: Dec14)=Total Current Assets/Total Current Liabilities
=5051/1766
=2.8601359

Current Ratio (Last Year: Dec13)=Total Current Assets/Total Current Liabilities
=4807/1993
=2.4119418

STMicroelectronics NV's current ratio of this year was 2.8601359. STMicroelectronics NV's current ratio of last year was 2.4119418. ==> 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.

STMicroelectronics NV's number of shares in issue this year was 878.2. STMicroelectronics NV's number of shares in issue last year was 890.6. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
=1265/3715
=0.34051144

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2614/8082
=0.32343479

STMicroelectronics NV's gross margin of this year was 0.34051144. STMicroelectronics NV's gross margin of last year was 0.32343479. ==> 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 (Dec13)
=3715/9173
=0.40499291

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec12)
=8082/10434
=0.77458309

STMicroelectronics NV's asset turnover of this year was 0.40499291. STMicroelectronics NV's asset turnover of last year was 0.77458309. ==> 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+1+1+0+1+1+1+0
=7

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

STMicroelectronics NV has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.


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.

STMicroelectronics NV Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1100011001
Question 2 1111111111
Question 3 0100010011
Question 4 1111111111
Question 5 1010111100
Question 6 0110101011
Question 7 1011101000
Question 8 0101010001
Question 9 0100010011
F-score 5754576357

STMicroelectronics NV Quarterly Data

Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14
Question 1 0000000011
Question 2 1111111111
Question 3 0000011111
Question 4 1111111111
Question 5 1100000000
Question 6 0011111111
Question 7 1000000001
Question 8 0000000011
Question 9 0011110000
F-score 4444454467
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