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GuruFocus has detected 2 Warning Signs with SUPERVALU Inc $SVU.
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SUPERVALU Inc (NYSE:SVU)
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

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

SVU' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 6

2
8

During the past 13 years, the highest Piotroski F-Score of SUPERVALU Inc was 8. The lowest was 2. 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 (Feb17) TTM:Last Year (Feb16) TTM:
Net Income was 46 + 31 + -26 + 599 = $650 Mil.
Cash Flow from Operations was 121 + 157 + -62 + 145 = $361 Mil.
Revenue was 5196 + 3865 + 3003 + 2907 = $14,971 Mil.
Gross Profit was 779 + 562 + 407 + 435 = $2,183 Mil.
Average Total Assets from the begining of this year (Feb16)
to the end of this year (Feb17) was
(4370 + 4373 + 4361 + 4474 + 3580) / 5 = $4231.6 Mil.
Total Assets at the begining of this year (Feb16) was $4,370 Mil.
Long-Term Debt was $1,449 Mil.
Total Current Assets was $1,541 Mil.
Total Current Liabilities was $1,229 Mil.
Net Income was 61 + 31 + 34 + 52 = $178 Mil.

Revenue was 5407 + 4062 + 3045 + 2891 = $15,405 Mil.
Gross Profit was 810 + 583 + 436 + 431 = $2,260 Mil.
Average Total Assets from the begining of last year (Feb15)
to the end of last year (Feb16) was
(4434 + 4491 + 4612 + 4643 + 4370) / 5 = $4510 Mil.
Total Assets at the begining of last year (Feb15) was $4,434 Mil.
Long-Term Debt was $2,391 Mil.
Total Current Assets was $1,635 Mil.
Total Current Liabilities was $1,572 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.

SUPERVALU Inc's current net income (TTM) was 650. ==> 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.

SUPERVALU Inc's current cash flow from operations (TTM) was 361. ==> 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.

SUPERVALU Inc's return on assets of this year was 0.14874142. SUPERVALU Inc's return on assets of last year was 0.04014434. ==> 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.

SUPERVALU Inc's current net income (TTM) was 650. SUPERVALU Inc's current cash flow from operations (TTM) was 361. ==> 361 <= 650 ==> CFROA <= ROA ==> Score 0.

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: Feb17)=Long-Term Debt/Average Total Assets from Feb16 to Feb17
=1449/4231.6
=0.34242367

Gearing (Last Year: Feb16)=Long-Term Debt/Average Total Assets from Feb15 to Feb16
=2391/4510
=0.53015521

SUPERVALU Inc's gearing of this year was 0.34242367. SUPERVALU Inc's gearing of last year was 0.53015521. ==> 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: Feb17)=Total Current Assets/Total Current Liabilities
=1541/1229
=1.25386493

Current Ratio (Last Year: Feb16)=Total Current Assets/Total Current Liabilities
=1635/1572
=1.04007634

SUPERVALU Inc's current ratio of this year was 1.25386493. SUPERVALU Inc's current ratio of last year was 1.04007634. ==> 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.

SUPERVALU Inc's number of shares in issue this year was 268. SUPERVALU Inc's number of shares in issue last year was 268. ==> 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
=2183/14971
=0.14581524

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2260/15405
=0.14670562

SUPERVALU Inc's gross margin of this year was 0.14581524. SUPERVALU Inc's gross margin of last year was 0.14670562. ==> 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 (Feb16)
=14971/4370
=3.42585812

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Feb15)
=15405/4434
=3.47428958

SUPERVALU Inc's asset turnover of this year was 3.42585812. SUPERVALU Inc's asset turnover of last year was 3.47428958. ==> 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+0+1+1+1+0+0
=6

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

SUPERVALU 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 local exchange's currency.

SUPERVALU Inc Annual Data

Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15Feb16Feb17
Question 1 1010001111
Question 2 1111111111
Question 3 0010101101
Question 4 1111110110
Question 5 1100010011
Question 6 0101001101
Question 7 0101110001
Question 8 1010001010
Question 9 0110101110
F-score 5664546666

SUPERVALU Inc Quarterly Data

Nov14Feb15May15Aug15Nov15Feb16May16Aug16Nov16Feb17
Question 1 1111111111
Question 2 1111111111
Question 3 1111000001
Question 4 1111111110
Question 5 0011110011
Question 6 0100001101
Question 7 0000001111
Question 8 1011111100
Question 9 1100011110
F-score 6666567766
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