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Cimarex Energy Co (NYSE:XEC)
Piotroski F-Score
4 (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

Cimarex Energy Co has an F-score of 4 indicating the company's financial situation is typical for a stable company.

XEC' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 4

2
9

During the past 13 years, the highest Piotroski F-Score of Cimarex Energy Co was 9. The lowest was 2. And the median was 5.


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 (Sep15) TTM:Last Year (Sep14) TTM:
Net Income was 75.792 + -414.941 + -600.215 + -763.284 = $-1,703 Mil.
Cash Flow from Operations was 347.395 + 113.173 + 257.372 + 206.001 = $924 Mil.
Revenue was 538.551 + 361.002 + 424.283 + 356.055 = $1,680 Mil.
Gross Profit was 388.742 + 230.285 + 298.664 + 232.002 = $1,150 Mil.
Average Total Assets from the begining of this year (Sep14)
to the end of this year (Sep15) was
(8644.094 + 8725.293 + 7860.051 + 7568.504 + 6336.362) / 5 = $7826.8608 Mil.
Total Assets at the begining of this year (Sep14) was $8,644 Mil.
Long-Term Debt was $1,500 Mil.
Total Current Assets was $1,238 Mil.
Total Current Liabilities was $481 Mil.
Net Income was 206.827 + 138.457 + 148.64 + 144.315 = $638 Mil.

Revenue was 516.602 + 599.216 + 636.669 + 649.74 = $2,402 Mil.
Gross Profit was 410.193 + 471.043 + 494.065 + 497.495 = $1,873 Mil.
Average Total Assets from the begining of last year (Sep13)
to the end of last year (Sep14) was
(7054.364 + 7253.135 + 7618.635 + 8399.007 + 8644.094) / 5 = $7793.847 Mil.
Total Assets at the begining of last year (Sep13) was $7,054 Mil.
Long-Term Debt was $1,500 Mil.
Total Current Assets was $1,111 Mil.
Total Current Liabilities was $816 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.

Cimarex Energy Co's current net income (TTM) was -1,703. ==> Negative ==> Score 0.

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.

Cimarex Energy Co's current cash flow from operations (TTM) was 924. ==> 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 (Sep14)
=-1702.648/8644.094
=-0.19697241

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=638.239/7054.364
=0.09047435

Cimarex Energy Co's return on assets of this year was -0.19697241. Cimarex Energy Co's return on assets of last year was 0.09047435. ==> 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.

Cimarex Energy Co's current net income (TTM) was -1,703. Cimarex Energy Co's current cash flow from operations (TTM) was 924. ==> 924 > -1,703 ==> 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: Sep15)=Long-Term Debt/Average Total Assets from Sep14 to Sep15
=1500/7826.8608
=0.19164772

Gearing (Last Year: Sep14)=Long-Term Debt/Average Total Assets from Sep13 to Sep14
=1500/7793.847
=0.19245951

Cimarex Energy Co's gearing of this year was 0.19164772. Cimarex Energy Co's gearing of last year was 0.19245951. ==> 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: Sep15)=Total Current Assets/Total Current Liabilities
=1238.461/481.108
=2.57418501

Current Ratio (Last Year: Sep14)=Total Current Assets/Total Current Liabilities
=1110.537/815.643
=1.36154788

Cimarex Energy Co's current ratio of this year was 2.57418501. Cimarex Energy Co's current ratio of last year was 1.36154788. ==> 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.

Cimarex Energy Co's number of shares in issue this year was 93. Cimarex Energy Co's number of shares in issue last year was 85.8. ==> 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
=1149.693/1679.891
=0.68438548

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1872.796/2402.227
=0.77960826

Cimarex Energy Co's gross margin of this year was 0.68438548. Cimarex Energy Co's gross margin of last year was 0.77960826. ==> 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 (Sep14)
=1679.891/8644.094
=0.19433974

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Sep13)
=2402.227/7054.364
=0.34053063

Cimarex Energy Co's asset turnover of this year was 0.19433974. Cimarex Energy Co's asset turnover of last year was 0.34053063. ==> 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
=0+1+0+1+1+1+0+0+0
=4

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

Cimarex Energy Co has an F-score of 4 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.

Cimarex Energy Co Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Question 1 1110011111
Question 2 1111111111
Question 3 1000110010
Question 4 1111111111
Question 5 0110011000
Question 6 0110010001
Question 7 0100110000
Question 8 0001010010
Question 9 1001010011
F-score 5654494365

Cimarex Energy Co Quarterly Data

Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15
Question 1 1111111000
Question 2 1111111111
Question 3 0011110000
Question 4 1111111111
Question 5 0100000011
Question 6 0101111111
Question 7 0000000000
Question 8 0111000000
Question 9 0011111000
F-score 3667665344
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