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Constellation Brands Inc. (NYSE:STZ)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Constellation Brands Inc. has an F-score of 5 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: 4

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 (Feb14) TTM:Last Year (Feb13) TTM:
Net Income was 157.2 + 211 + 1522 + 52.9 = $1,943 Mil.
Cash Flow from Operations was 197.1 + 140.1 + 485.7 + 3.3 = $826 Mil.
Revenue was 1291.2 + 1443.3 + 1459.8 + 673.4 = $4,868 Mil.
Gross Profit was 548.9 + 609.7 + 577 + 256.1 = $1,992 Mil.
Total Assets at the begining of this year (Feb13) was $7,638 Mil.
Total Assets was $14,302 Mil.
Long-Term Debt was $6,373 Mil.
Total Current Assets was $2,747 Mil.
Total Current Liabilities was $2,026 Mil.
Net Income was 81.7 + 109.5 + 124.6 + 72 = $388 Mil.

Revenue was 695.9 + 766.9 + 698.5 + 634.8 = $2,796 Mil.
Gross Profit was 261.8 + 310.8 + 285.1 + 250.6 = $1,108 Mil.
Total Assets at the begining of last year (Feb12) was $7,110 Mil.
Total Assets was $7,638 Mil.
Long-Term Debt was $3,278 Mil.
Total Current Assets was $2,471 Mil.
Total Current Liabilities was $678 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.

Constellation Brands Inc.'s current net income was 1,943. ==> 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.

Constellation Brands Inc.'s current cash flow from operations was 826. ==> 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 (Feb13)
=1943.1/7638.1
=0.25439573

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Feb12)
=387.8/7109.9
=0.05454366

Constellation Brands Inc.'s return on assets of this year was 0.25439573. Constellation Brands Inc.'s return on assets of last year was 0.05454366. ==> 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.

Constellation Brands Inc.'s current net income was 1,943. Constellation Brands Inc.'s current cash flow from operations was 826. ==> 826 =< 1,943 ==> CFROA =< ROA ==> Score 0.

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
=6373.3/14302.1
=0.44561987

Gearing (Last Year)=Long-Term Debt/Total Assets
=3277.8/7638.1
=0.42913814

Constellation Brands Inc.'s gearing of this year was 0.44561987. Constellation Brands Inc.'s gearing of last year was 0.42913814. ==> 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
=2747.2/2025.7
=1.35617317

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=2471.2/677.9
=3.64537542

Constellation Brands Inc.'s current ratio of this year was 1.35617317. Constellation Brands Inc.'s current ratio of last year was 3.64537542. ==> Last year's current ratio is higher ==> Score 0.

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.

Constellation Brands Inc.'s number of shares in issue this year was 199.2. Constellation Brands Inc.'s number of shares in issue last year was 195.3. ==> There is more 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
=1991.7/4867.7
=0.40916655

Gross Margin (Last Year)=Gross Profit/Revenue
=1108.3/2796.1
=0.39637352

Constellation Brands Inc.'s gross margin of this year was 0.40916655. Constellation Brands Inc.'s gross margin of last year was 0.39637352. ==> This year's gross margin is higher. ==> Score 1.

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 (Feb13)
=4867.7/7638.1
=0.637292

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Feb12)
=2796.1/7109.9
=0.39326854

Constellation Brands Inc.'s asset turnover of this year was 0.637292. Constellation Brands Inc.'s asset turnover of last year was 0.39326854. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

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

Good or high score = 8 or 9

Bad or low score = 0 or 1

Constellation Brands Inc. 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.

Constellation Brands Inc. Annual Data

Feb05Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14
Q1 1110011111
Q2 1111111111
Q3 0010111001
Q4 1101111110
Q5 0100010100
Q6 1000101010
Q7 0001100110
Q8 1111001101
Q9 0010010011
F-score 5554566665

Constellation Brands Inc. Quarterly Data

Nov11Feb12May12Aug12Nov12Feb13May13Aug13Nov13Feb14
Q1 1111111111
Q2 1111111111
Q3 1000000111
Q4 1111111000
Q5 1100000000
Q6 0011111000
Q7 1111110000
Q8 1111100001
Q9 0000111111
F-score 7666765440
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