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TE Connectivity Ltd (NYSE:TEL)
Piotroski F-Score
9 (As of Today)

Good Sign:

Piotroski F-Score of 9 is 9, indicating very healthy situation.

The zones of discrimination were as such:

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

TE Connectivity Ltd has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.

TEL' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 9

2
9

During the past 12 years, the highest Piotroski F-Score of TE Connectivity Ltd was 9. The lowest was 2. And the median was 7.


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 (Jun14) TTM:Last Year (Jun13) TTM:
Net Income was 403 + 362 + 353 + 387 = $1,505 Mil.
Cash Flow from Operations was 500 + 449 + 385 + 593 = $1,927 Mil.
Revenue was 3580 + 3431 + 3326 + 3432 = $13,769 Mil.
Gross Profit was 1204 + 1173 + 1117 + 1156 = $4,650 Mil.
Total Assets at the begining of this year (Jun13) was $18,090 Mil.
Total Assets was $18,871 Mil.
Long-Term Debt was $2,375 Mil.
Total Current Assets was $6,873 Mil.
Total Current Liabilities was $3,860 Mil.
Net Income was 335 + 277 + 277 + 396 = $1,285 Mil.

Revenue was 3449 + 3265 + 3134 + 3364 = $13,212 Mil.
Gross Profit was 1132 + 1052 + 989 + 1064 = $4,237 Mil.
Total Assets at the begining of last year (Jun12) was $18,942 Mil.
Total Assets was $18,090 Mil.
Long-Term Debt was $2,307 Mil.
Total Current Assets was $6,018 Mil.
Total Current Liabilities was $4,003 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.

TE Connectivity Ltd's current net income was 1,505. ==> 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.

TE Connectivity Ltd's current cash flow from operations was 1,927. ==> 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 (Jun13)
=1505/18090
=0.08319514

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Jun12)
=1285/18942
=0.06783867

TE Connectivity Ltd's return on assets of this year was 0.08319514. TE Connectivity Ltd's return on assets of last year was 0.06783867. ==> 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.

TE Connectivity Ltd's current net income was 1,505. TE Connectivity Ltd's current cash flow from operations was 1,927. ==> 1,927 > 1,505 ==> 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 0 if this year's gearing is higher, 1 otherwise.

Gearing (This Year)=Long-Term Debt/Total Assets
=2375/18871
=0.12585449

Gearing (Last Year)=Long-Term Debt/Total Assets
=2307/18090
=0.12752902

TE Connectivity Ltd's gearing of this year was 0.12585449. TE Connectivity Ltd's gearing of last year was 0.12752902. ==> This year is lower or equal to last year. ==> Score 1.

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
=6873/3860
=1.78056995

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=6018/4003
=1.50337247

TE Connectivity Ltd's current ratio of this year was 1.78056995. TE Connectivity Ltd's current ratio of last year was 1.50337247. ==> 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 0 if there is larger number of shares in issue this year, 1 otherwise.

TE Connectivity Ltd's number of shares in issue this year was 416. TE Connectivity Ltd's number of shares in issue last year was 421. ==> There is smaller number of shares in issue this year, or the same. ==> 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
=4650/13769
=0.33771516

Gross Margin (Last Year)=Gross Profit/Revenue
=4237/13212
=0.32069331

TE Connectivity Ltd's gross margin of this year was 0.33771516. TE Connectivity Ltd's gross margin of last year was 0.32069331. ==> 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 (Jun13)
=13769/18090
=0.76113875

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Jun12)
=13212/18942
=0.69749762

TE Connectivity Ltd's asset turnover of this year was 0.76113875. TE Connectivity Ltd's asset turnover of last year was 0.69749762. ==> 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+1+1+1+1+1+1
=9

Good or high score = 8 or 9

Bad or low score = 0 or 1

TE Connectivity Ltd has an F-score of 9. It is a good or high score, which usually indicates a very healthy situation.


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.

TE Connectivity Ltd Annual Data

Sep04Sep05Sep06Sep07Sep08Sep09Sep10Sep11Sep12Sep13
Q1 10101111
Q2 11111111
Q3 10101101
Q4 11011111
Q5 01011011
Q6 00110100
Q7 11111111
Q8 00001001
Q9 11001100
F-score 65558757

TE Connectivity Ltd Quarterly Data

Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14
Q1 1111111111
Q2 1111111111
Q3 0000011111
Q4 1111111111
Q5 1110111111
Q6 1001000111
Q7 1111111111
Q8 0001111111
Q9 1000000011
F-score 7556677899
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