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

Warning Sign:

Piotroski F-Score of 3 is low, which usually implies poor business operation.

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 3. It is a bad or low score, which usually implies poor business operation.

XEC' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 8
Current: 3

2
8

During the past 14 years, the highest Piotroski F-Score of Cimarex Energy Co was 8. 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 (Mar16) TTM:Last Year (Mar15) TTM:
Net Income was -600.215 + -763.284 + -630.508 + -186.131 = $-2,180 Mil.
Cash Flow from Operations was 257.372 + 206.001 + 114.954 + 85.06 = $663 Mil.
Revenue was 424.283 + 356.055 + 311.279 + 240.6 = $1,332 Mil.
Gross Profit was 298.664 + 232.002 + 171.794 + 115.375 = $818 Mil.
Average Total Assets from the begining of this year (Mar15)
to the end of this year (Mar16) was
(7860.051 + 7568.504 + 6336.362 + 5243.286 + 4901.261) / 5 = $6381.8928 Mil.
Total Assets at the begining of this year (Mar15) was $7,860 Mil.
Long-Term Debt was $1,486 Mil.
Total Current Assets was $931 Mil.
Total Current Liabilities was $357 Mil.
Net Income was 148.64 + 144.315 + 75.792 + -414.941 = $-46 Mil.

Revenue was 636.669 + 649.74 + 538.551 + 361.002 = $2,186 Mil.
Gross Profit was 494.065 + 497.495 + 388.742 + 230.285 = $1,611 Mil.
Average Total Assets from the begining of last year (Mar14)
to the end of last year (Mar15) was
(7618.635 + 8399.007 + 8644.094 + 8725.293 + 7860.051) / 5 = $8249.416 Mil.
Total Assets at the begining of last year (Mar14) was $7,619 Mil.
Long-Term Debt was $1,500 Mil.
Total Current Assets was $561 Mil.
Total Current Liabilities was $553 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 -2,180. ==> 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 663. ==> 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 (Mar15)
=-2180.138/7860.051
=-0.27736945

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=-46.194/7618.635
=-0.00606329

Cimarex Energy Co's return on assets of this year was -0.27736945. Cimarex Energy Co's return on assets of last year was -0.00606329. ==> 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 -2,180. Cimarex Energy Co's current cash flow from operations (TTM) was 663. ==> 663 > -2,180 ==> 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: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=1486.211/6381.8928
=0.23287934

Gearing (Last Year: Mar15)=Long-Term Debt/Average Total Assets from Mar14 to Mar15
=1500/8249.416
=0.18183105

Cimarex Energy Co's gearing of this year was 0.23287934. Cimarex Energy Co's gearing of last year was 0.18183105. ==> Last year is lower than this year ==> Score 0.

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: Mar16)=Total Current Assets/Total Current Liabilities
=931.09/357.092
=2.6074233

Current Ratio (Last Year: Mar15)=Total Current Assets/Total Current Liabilities
=561.185/553.195
=1.01444337

Cimarex Energy Co's current ratio of this year was 2.6074233. Cimarex Energy Co's current ratio of last year was 1.01444337. ==> 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
=817.835/1332.217
=0.61389023

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1610.587/2185.962
=0.73678637

Cimarex Energy Co's gross margin of this year was 0.61389023. Cimarex Energy Co's gross margin of last year was 0.73678637. ==> 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 (Mar15)
=1332.217/7860.051
=0.16949216

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar14)
=2185.962/7618.635
=0.28692305

Cimarex Energy Co's asset turnover of this year was 0.16949216. Cimarex Energy Co's asset turnover of last year was 0.28692305. ==> 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+0+1+0+0+0
=3

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

Cimarex Energy Co has an F-score of 3. It is a bad or low score, which usually implies poor business operation.


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

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Question 1 1100111110
Question 2 1111111111
Question 3 0001100100
Question 4 1111111111
Question 5 1100110000
Question 6 1100100011
Question 7 0010001000
Question 8 0010100100
Question 9 0010100110
F-score 5553844653

Cimarex Energy Co Quarterly Data

Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16
Question 1 1111100000
Question 2 1111111111
Question 3 1111000000
Question 4 1111111111
Question 5 0000001100
Question 6 0111111111
Question 7 0000000000
Question 8 1100000000
Question 9 1111100000
F-score 6766534433
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