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Cimarex Energy Co (NYSE:XEC)
Piotroski F-Score
7 (As of Today)

Good Sign:

Piotroski F-Score of 7 is 7, 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

Cimarex Energy Co has an F-score of 7 indicating the company's financial situation is typical for a stable company.

XEC' s 10-Year Piotroski F-Score Range
Min: 2   Max: 9
Current: 7

2
9

During the past 12 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 (Mar14) TTM:Last Year (Mar13) TTM:
Net Income was 138.457 + 206.827 + 138.37 + 129.565 = $613 Mil.
Cash Flow from Operations was 348.024 + 383.6 + 370.962 + 322.708 = $1,425 Mil.
Revenue was 599.216 + 516.602 + 561.336 + 494.166 = $2,171 Mil.
Gross Profit was 471.043 + 410.193 + 452.362 + 397.118 = $1,731 Mil.
Total Assets at the begining of this year (Mar13) was $6,570 Mil.
Total Assets was $7,619 Mil.
Long-Term Debt was $1,025 Mil.
Total Current Assets was $515 Mil.
Total Current Liabilities was $729 Mil.
Net Income was 89.927 + 99.152 + 84.262 + 64.302 = $338 Mil.

Revenue was 426.356 + 440.868 + 406.912 + 353.416 = $1,628 Mil.
Gross Profit was 332.18 + 352.051 + 324.236 + 272.504 = $1,281 Mil.
Total Assets at the begining of last year (Mar12) was $5,736 Mil.
Total Assets was $6,570 Mil.
Long-Term Debt was $870 Mil.
Total Current Assets was $444 Mil.
Total Current Liabilities was $646 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.

Cimarex Energy Co's current net income was 613. ==> 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.

Cimarex Energy Co's current cash flow from operations was 1,425. ==> 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 (Mar13)
=613.219/6569.949
=0.09333695

ROA (Last Year)=Net Income/Total Assets at the beginning of last year (Mar12)
=337.643/5736.449
=0.05885924

Cimarex Energy Co's return on assets of this year was 0.09333695. Cimarex Energy Co's return on assets of last year was 0.05885924. ==> 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.

Cimarex Energy Co's current net income was 613. Cimarex Energy Co's current cash flow from operations was 1,425. ==> 1,425 > 613 ==> 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 1 if gearing is lower, 0 if it’s higher.

Gearing (This Year)=Long-Term Debt/Total Assets
=1025/7618.635
=0.13453854

Gearing (Last Year)=Long-Term Debt/Total Assets
=870/6569.949
=0.13242112

Cimarex Energy Co's gearing of this year was 0.13453854. Cimarex Energy Co's gearing of last year was 0.13242112. ==> 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
=514.678/728.986
=0.70601905

Current Ratio (Last Year)=Total Current Assets/Total Current Liabilities
=444.497/645.625
=0.68847551

Cimarex Energy Co's current ratio of this year was 0.70601905. Cimarex Energy Co's current ratio of last year was 0.68847551. ==> 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 1 if there is fewer number of shares in issue this year. Score 0 otherwise.

Cimarex Energy Co's number of shares in issue this year was 85.6. Cimarex Energy Co's number of shares in issue last year was 85. ==> 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
=1730.716/2171.32
=0.79708012

Gross Margin (Last Year)=Gross Profit/Revenue
=1280.971/1627.552
=0.78705381

Cimarex Energy Co's gross margin of this year was 0.79708012. Cimarex Energy Co's gross margin of last year was 0.78705381. ==> 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 (Mar13)
=2171.32/6569.949
=0.33049267

Asset Turnover (Last Year)=Revenue/Total Assets at the beginning of last year (Mar12)
=1627.552/5736.449
=0.28372117

Cimarex Energy Co's asset turnover of this year was 0.33049267. Cimarex Energy Co's asset turnover of last year was 0.28372117. ==> 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+0+1+0+1+1
=7

Good or high score = 8 or 9

Bad or low score = 0 or 1

Cimarex Energy Co has an F-score of 7 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

Dec04Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13
Q1 11001111
Q2 11111111
Q3 00011001
Q4 11111111
Q5 01011100
Q6 11001000
Q7 00101000
Q8 00101001
Q9 00101001
F-score 45549436

Cimarex Energy Co Quarterly Data

Dec11Mar12Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14
Q1 1111111111
Q2 1111111111
Q3 0000000011
Q4 1111111111
Q5 1000000100
Q6 0000000101
Q7 0011010000
Q8 0000000111
Q9 0000000011
F-score 4344343667
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