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Constellation Brands Inc (NYSE:STZ)
Piotroski F-Score
6 (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

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

STZ' 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 Constellation Brands Inc 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 (Nov14) TTM:Last Year (Nov13) TTM:
Net Income was 157.2 + 206.7 + 195.8 + 222.2 = $782 Mil.
Cash Flow from Operations was 197.1 + 232.3 + 435.8 + 82 = $947 Mil.
Revenue was 1291.2 + 1526 + 1604.1 + 1541.7 = $5,963 Mil.
Gross Profit was 548.9 + 670.1 + 672 + 638.9 = $2,530 Mil.
Average Total Assets from the begining of this year (Nov13)
to the end of this year (Nov14) was
(14336.3 + 14302.1 + 14842.4 + 14657.4 + 14980.5) / 5 = $14623.74 Mil.
Total Assets at the begining of this year (Nov13) was $14,336 Mil.
Long-Term Debt was $7,082 Mil.
Total Current Assets was $3,031 Mil.
Total Current Liabilities was $1,249 Mil.
Net Income was 81.7 + 52.9 + 1522 + 211 = $1,868 Mil.

Revenue was 695.9 + 673.4 + 1459.8 + 1443.3 = $4,272 Mil.
Gross Profit was 261.8 + 256.1 + 577 + 609.7 = $1,705 Mil.
Average Total Assets from the begining of last year (Nov12)
to the end of last year (Nov13) was
(8322.7 + 7638.1 + 9452.4 + 14122.8 + 14336.3) / 5 = $10774.46 Mil.
Total Assets at the begining of last year (Nov12) was $8,323 Mil.
Long-Term Debt was $6,897 Mil.
Total Current Assets was $2,835 Mil.
Total Current Liabilities was $1,755 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.

Constellation Brands Inc's current net income (TTM) was 782. ==> 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.

Constellation Brands Inc's current cash flow from operations (TTM) was 947. ==> 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.

ROA (This Year)=Net Income (TTM)/Total Assets at the Beginning of This Year (Nov13)
=781.9/14336.3
=0.05453987

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Nov12)
=1867.6/8322.7
=0.22439833

Constellation Brands Inc's return on assets of this year was 0.05453987. Constellation Brands Inc's return on assets of last year was 0.22439833. ==> 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.

Constellation Brands Inc's current net income (TTM) was 782. Constellation Brands Inc's current cash flow from operations (TTM) was 947. ==> 947 > 782 ==> 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: Nov14)=Long-Term Debt/Average Total Assets from Nov13 to Nov14
=7081.5/14623.74
=0.48424685

Gearing (Last Year: Nov13)=Long-Term Debt/Average Total Assets from Nov12 to Nov13
=6897/10774.46
=0.64012489

Constellation Brands Inc's gearing of this year was 0.48424685. Constellation Brands Inc's gearing of last year was 0.64012489. ==> 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: Nov14)=Total Current Assets/Total Current Liabilities
=3030.8/1248.5
=2.42755306

Current Ratio (Last Year: Nov13)=Total Current Assets/Total Current Liabilities
=2835.4/1755
=1.61561254

Constellation Brands Inc's current ratio of this year was 2.42755306. Constellation Brands Inc's current ratio of last year was 1.61561254. ==> 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.

Constellation Brands Inc's number of shares in issue this year was 201.3. Constellation Brands Inc's number of shares in issue last year was 198.1. ==> 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
=2529.9/5963
=0.42426631

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1704.6/4272.4
=0.3989795

Constellation Brands Inc's gross margin of this year was 0.42426631. Constellation Brands Inc's gross margin of last year was 0.3989795. ==> 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 (Nov13)
=5963/14336.3
=0.41593717

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Nov12)
=4272.4/8322.7
=0.51334303

Constellation Brands Inc's asset turnover of this year was 0.41593717. Constellation Brands Inc's asset turnover of last year was 0.51334303. ==> 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+1+0+1+0
=6

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

Constellation Brands Inc 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.

Constellation Brands Inc Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Question 1 1110011111
Question 2 1111111111
Question 3 0010111001
Question 4 1101111110
Question 5 0100110100
Question 6 1000101010
Question 7 0001100110
Question 8 1111001101
Question 9 0010010011
F-score 5554666665

Constellation Brands Inc Quarterly Data

Aug12Nov12Feb13May13Aug13Nov13Feb14May14Aug14Nov14
Question 1 1111111111
Question 2 1111111111
Question 3 0000111100
Question 4 1111000011
Question 5 0000000111
Question 6 1111000011
Question 7 1110000000
Question 8 1100001111
Question 9 0111111100
F-score 6765445666
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