Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
PNM Resources's Sloan Ratio for the quarter that ended in Dec. 2023 was 6.10%.
As of Dec. 2023, PNM Resources has a Sloan Ratio of 6.10%, indicating the company is in the safe zone and there is no funny business with accruals.
PNM Resources Sloan Ratio % Historical Data
The historical data trend for PNM Resources's Sloan Ratio % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of PNM Resources's Sloan Ratio %
For the Utilities - Regulated Electric subindustry, PNM Resources's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
PNM Resources's Sloan Ratio % Distribution in the Utilities - Regulated Industry
For the Utilities - Regulated industry and Utilities sector, PNM Resources's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where PNM Resources's Sloan Ratio % falls into.
PNM Resources Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
PNM Resources's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
PNM Resources's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 55.146 (Mar. 2023 ) + 45.436 (Jun. 2023 ) + 37.858 (Sep. 2023 ) + -50.095 (Dec. 2023 ) = $88 Mil.
PNM Resources's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was 107.801 (Mar. 2023 ) + 134.642 (Jun. 2023 ) + 170.161 (Sep. 2023 ) + 138.567 (Dec. 2023 ) = $551 Mil.
PNM Resources's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -118.913 (Mar. 2023 ) + -411.35 (Jun. 2023 ) + -281.614 (Sep. 2023 ) + -276.529 (Dec. 2023 ) = $-1,088 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
PNM Resources (NYSE:PNM) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Dec. 2023, PNM Resources has a Sloan Ratio of 6.10%, indicating the company is in the safe zone and there is no funny business with accruals.
PNM Resources Sloan Ratio % Related Terms
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PNM Resources (PNM Resources) Business Description
PNM Resources Inc, or PNMR, is a holding company that owns regulated utilities companies providing electricity and electric services. PNMR segments its operations by its two subsidiaries, PNM and TNMP. PNM provides electric generation, transmission, and distribution services mainly to areas of New Mexico. While PNM uses a variety of fuel sources across its power plant portfolio, its coal and gas-fueled sites produce most of the energy. TNMP owns and operates transmission and distribution services primarily in small to medium-sized communities in Texas. Both subsidiaries generate revenue for PNMR through the sale of electricity and transmission service fees fairly evenly split between residential and commercial customers. PNM generates the vast majority of PNMR's total revenue.
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