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GuruFocus has detected 6 Warning Signs with STMicroelectronics NV $STM.
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STMicroelectronics NV (NYSE:STM)
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

STMicroelectronics NV has an F-score of 6 indicating the company's financial situation is typical for a stable company.

STM' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 8
Current: 4

1
8

During the past 13 years, the highest Piotroski F-Score of STMicroelectronics NV was 8. The lowest was 1. 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 local exchange's currency.

This Year (Dec16) TTM:Last Year (Dec15) TTM:
Net Income was -41 + 50 + 71 + 112 = $192 Mil.
Cash Flow from Operations was 141 + 323 + 198 + 377 = $1,039 Mil.
Revenue was 1613 + 1703 + 1797 + 1860 = $6,973 Mil.
Gross Profit was 538 + 471 + 643 + 697 = $2,349 Mil.
Average Total Assets from the begining of this year (Dec15)
to the end of this year (Dec16) was
(8195 + 8381 + 9128 + 8278 + 8008) / 5 = $8398 Mil.
Total Assets at the begining of this year (Dec15) was $8,195 Mil.
Long-Term Debt was $1,334 Mil.
Total Current Assets was $4,482 Mil.
Total Current Liabilities was $1,588 Mil.
Net Income was -22 + 35 + 90 + 2 = $105 Mil.

Revenue was 1705 + 1760 + 1764 + 1668 = $6,897 Mil.
Gross Profit was 566 + 595 + 613 + 558 = $2,332 Mil.
Average Total Assets from the begining of last year (Dec14)
to the end of last year (Dec15) was
(9004 + 8712 + 9836 + 8686 + 8195) / 5 = $8886.6 Mil.
Total Assets at the begining of last year (Dec14) was $9,004 Mil.
Long-Term Debt was $1,421 Mil.
Total Current Assets was $4,680 Mil.
Total Current Liabilities was $1,560 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 192. ==> 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 1,039. ==> 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 0.02342892. STMicroelectronics NV's return on assets of last year was 0.01166148. ==> 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 192. STMicroelectronics NV's current cash flow from operations (TTM) was 1,039. ==> 1,039 > 192 ==> 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: Dec16)=Long-Term Debt/Average Total Assets from Dec15 to Dec16
=1334/8398
=0.15884734

Gearing (Last Year: Dec15)=Long-Term Debt/Average Total Assets from Dec14 to Dec15
=1421/8886.6
=0.15990368

STMicroelectronics NV's gearing of this year was 0.15884734. STMicroelectronics NV's gearing of last year was 0.15990368. ==> 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: Dec16)=Total Current Assets/Total Current Liabilities
=4482/1588
=2.82241814

Current Ratio (Last Year: Dec15)=Total Current Assets/Total Current Liabilities
=4680/1560
=3

STMicroelectronics NV's current ratio of this year was 2.82241814. STMicroelectronics NV's current ratio of last year was 3. ==> 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.

STMicroelectronics NV's number of shares in issue this year was 886.3. STMicroelectronics NV's number of shares in issue last year was 880.6. ==> 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
=2349/6973
=0.33687079

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2332/6897
=0.33811802

STMicroelectronics NV's gross margin of this year was 0.33687079. STMicroelectronics NV's gross margin of last year was 0.33811802. ==> 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 (Dec15)
=6973/8195
=0.85088469

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Dec14)
=6897/9004
=0.76599289

STMicroelectronics NV's asset turnover of this year was 0.85088469. STMicroelectronics NV's asset turnover of last year was 0.76599289. ==> This year's asset turnover is higher. ==> Score 1.

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+1+0+0+0+1
=6

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

STMicroelectronics NV has an F-score of 6 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 local exchange's currency.

STMicroelectronics NV Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 0001100111
Question 2 1111111111
Question 3 0001001101
Question 4 1111111111
Question 5 0011110011
Question 6 1010101110
Question 7 1110110010
Question 8 0101000110
Question 9 0001001101
F-score 4457645776

STMicroelectronics NV Quarterly Data

Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 1111100001
Question 4 1111111111
Question 5 0000111111
Question 6 1111011110
Question 7 0011110000
Question 8 1111111000
Question 9 1100000011
F-score 7777776566
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