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Seagate Technology PLC (NAS:STX)
Piotroski F-Score
6 (As of Today)

The zones of discrimination were as such:

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

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

STX' 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 Seagate Technology PLC 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 395 + 428 + 427 + 348 = $1,598 Mil.
Cash Flow from Operations was 443 + 856 + 682 + 388 = $2,369 Mil.
Revenue was 3406 + 3528 + 3489 + 3424 = $13,847 Mil.
Gross Profit was 959 + 987 + 975 + 939 = $3,860 Mil.
Total Assets at the begining of this year (Mar13) was $8,743 Mil.
Total Assets was $8,659 Mil.
Long-Term Debt was $3,514 Mil.
Total Current Assets was $5,151 Mil.
Total Current Liabilities was $2,162 Mil.
Net Income was 416 + 492 + 582 + 1013 = $2,503 Mil.

Revenue was 3526 + 3668 + 3732 + 4482 = $15,408 Mil.
Gross Profit was 948 + 992 + 1061 + 1484 = $4,485 Mil.
Total Assets at the begining of last year (Mar12) was $10,064 Mil.
Total Assets was $8,743 Mil.
Long-Term Debt was $2,474 Mil.
Total Current Assets was $4,987 Mil.
Total Current Liabilities was $2,601 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.

Seagate Technology PLC's current net income was 1,598. ==> 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.

Seagate Technology PLC's current cash flow from operations was 2,369. ==> 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 (Mar13)
=1598/8743
=0.18277479

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=2503/10064
=0.24870827

Seagate Technology PLC's return on assets of this year was 0.18277479. Seagate Technology PLC's return on assets of last year was 0.24870827. ==> 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.

Seagate Technology PLC's current net income was 1,598. Seagate Technology PLC's current cash flow from operations was 2,369. ==> 2,369 > 1,598 ==> 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
=3514/8659
=0.40582053

Gearing (Last Year)=Long-Term Debt/Total Assets
=2474/8743
=0.28296923

Seagate Technology PLC's gearing of this year was 0.40582053. Seagate Technology PLC's gearing of last year was 0.28296923. ==> 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
=5151/2162
=2.38251619

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=4987/2601
=1.91733948

Seagate Technology PLC's current ratio of this year was 2.38251619. Seagate Technology PLC's current ratio of last year was 1.91733948. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Seagate Technology PLC's number of shares in issue this year was 338. Seagate Technology PLC's number of shares in issue last year was 369. ==> There is the same number of shares in issue this year, or fewer. ==> Score 1.

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
=3860/13847
=0.27876074

Gross Margin (Last Year)=Gross Profit/Revenue
=4485/15408
=0.29108255

Seagate Technology PLC's gross margin of this year was 0.27876074. Seagate Technology PLC's gross margin of last year was 0.29108255. ==> 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 (Mar13)
=13847/8743
=1.58378131

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=15408/10064
=1.53100159

Seagate Technology PLC's asset turnover of this year was 1.58378131. Seagate Technology PLC's asset turnover of last year was 1.53100159. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score=Q1+Q2+Q3+Q4+Q5+Q6+Q7+Q8+Q9
=1+1+0+1+0+1+1+0+1
=6

Good or high score = 8 or 9

Bad or low score = 0 or 1

Seagate Technology PLC 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 own currency.

Seagate Technology PLC Annual Data

Jun05Jun06Jun07Jun08Jun09Jun10Jun11Jun12Jun13Jun14
Q1 1111011111
Q2 1111111111
Q3 1001010100
Q4 1111111111
Q5 1101010100
Q6 0010111111
Q7 0001101111
Q8 0101010101
Q9 1001010101
F-score 6548485957

Seagate Technology PLC Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 1111100000
Q4 1111111111
Q5 0110101000
Q6 1110011111
Q7 0111111111
Q8 1111100001
Q9 1111000011
F-score 7997756560
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