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Esterline Technologies Corp  (NYSE:ESL) Piotroski F-Score: 8 (As of Today)

Good Sign:

Piotroski F-Score of 8 is 8, indicating very healthy situation.

The zones of discrimination were as such:

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

Esterline Technologies Corp has an F-score of 8. It is a good or high score, which usually indicates a very healthy situation.

NYSE:ESL' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 8

2
9

During the past 13 years, the highest Piotroski F-Score of Esterline Technologies Corp was 9. The lowest was 2. And the median was 6.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Esterline Technologies Corp Annual Data

Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Sep15 Sep16
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 8.00 6.00 4.00 6.00

Esterline Technologies Corp Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 6.00 8.00 8.00 8.00

Competitive Comparison
* 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.

How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

This Year (Jun17) TTM:Last Year (Jun16) TTM:
Net Income was 52.272 + 16.189 + 35.113 + 30.473 = $134 Mil.
Cash Flow from Operations was 48.546 + 45.535 + 45.81 + 47.526 = $187 Mil.
Revenue was 543.752 + 457.733 + 509.182 + 503.753 = $2,014 Mil.
Gross Profit was 193.769 + 144.047 + 175.919 + 170.629 = $684 Mil.
Average Total Assets from the begining of this year (Jun16)
to the end of this year (Jun17) was
(3004.117 + 3032.031 + 2927.8 + 2946.476 + 3049.631) / 5 = $2992.011 Mil.
Total Assets at the begining of this year ({FiscalYear0}) was $3,004 Mil.
Long-Term Debt & Capital Lease Obligation was $766 Mil.
Total Current Assets was $1,210 Mil.
Total Current Liabilities was $376 Mil.
Total Assets was 2.986 + 5.084 + 14.973 + 29.356 = $52 Mil.

Revenue was 331.808 + 441.477 + 490.31 + 517.092 = $1,781 Mil.
Gross Profit was 110.596 + 137.719 + 156.173 + 173.584 = $578 Mil.
Average Total Assets from the begining of last year (Jul15)
to the end of last year (Jun16) was
(3085.652 + 3007.03 + 2919.322 + 3012.04 + 3004.117) / 5 = $3005.6322 Mil.
Total Assets at the begining of last year (Jul15) was $3,086 Mil.
Long-Term Debt & Capital Lease Obligation was $859 Mil.
Total Current Assets was $1,149 Mil.
Total Current Liabilities was $411 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.

Esterline Technologies Corp's current Net Income (TTM) was {NetIncome0_f}. ==> Positive ==> Score 1.

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.

Esterline Technologies Corp's current Cash Flow from Operations (TTM) was 187. ==> 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/Total Assets(Jun16)
=134.047/3004.117
=0.0446211

ROA (Last Year)=Net Income/Total Assets(Jul15)
=52.399/3085.652
=0.0169815

Esterline Technologies Corp's return on assets of this year was 0.0446211. Esterline Technologies Corp's return on assets of last year was 0.0169815. ==> This year is higher. ==> Score 1.

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.

Esterline Technologies Corp's current Net Income (TTM) was 134. Esterline Technologies Corp's current Cash Flow from Operations (TTM) was 187. ==> 187 > 134 ==> 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: Jun17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun16 to Jun17
=766.024/2992.011
=0.25602312

Gearing (Last Year: Jun16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jul15 to Jun16
=858.753/3005.6322
=0.2857146

Esterline Technologies Corp's gearing of this year was 0.25602312. Esterline Technologies Corp's gearing of last year was 0.2857146. ==> 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: Jun17)=Total Current Assets/Total Current Liabilities
=1210.074/376.282
=3.21587001

Current Ratio (Last Year: Jun16)=Total Current Assets/Total Current Liabilities
=1148.549/410.547
=2.79760661

Esterline Technologies Corp's current ratio of this year was 3.21587001. Esterline Technologies Corp's current ratio of last year was 2.79760661. ==> 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.

Esterline Technologies Corp's number of shares in issue this year was 30.1. Esterline Technologies Corp's number of shares in issue last year was 29.6. ==> 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
=684.364/2014.42
=0.33973253

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=578.072/1780.687
=0.32463426

Esterline Technologies Corp's gross margin of this year was 0.33973253. Esterline Technologies Corp's gross margin of last year was 0.32463426. ==> This year's gross margin is higher. ==> Score 1.

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/Total Assets at the Beginning of This Year (Jun16)
=2014.42/3004.117
=0.67055311

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jul15)
=1780.687/3085.652
=0.57708614

Esterline Technologies Corp's asset turnover of this year was 0.67055311. Esterline Technologies Corp's asset turnover of last year was 0.57708614. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=1+1+1+1+1+1+0+1+1
=8

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

Esterline Technologies Corp has an F-score of 8. 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.


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