Graco (NYSE:GGG) Piotroski F-Score

: 6 (As of Today)

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The zones of discrimination were as such:

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

Graco has an F-score of 6 indicating the company's financial situation is typical for a stable company.

The historical rank and industry rank for Graco's Piotroski F-Score or its related term are showing as below:

GGG' s Piotroski F-Score Range Over the Past 10 Years
Min: 1 Med: 6 Max: 9
Current: 6

During the past 13 years, the highest Piotroski F-Score of Graco was 9. The lowest was 1. And the median was 6.

Graco Piotroski F-Score Historical Data

The historical data trend for Graco's Piotroski F-Score 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.

* Premium members only.

Graco Annual Data

Trend

Dec13

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Piotroski F-Score

6.00

5.00

7.00

5.00

Graco Quarterly Data
	Jun18	Sep18	Dec18	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23
Piotroski F-Score																5.00	4.00	4.00	5.00	6.00

Competitive Comparison

For the Specialty Industrial Machinery subindustry, Graco's Piotroski F-Score, along with its competitors' market caps and Piotroski F-Score 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.

Annual Data Quarterly Data

Graco Piotroski F-Score Distribution

For the Industrial Products industry and Industrials sector, Graco's Piotroski F-Score distribution charts can be found below:

* The bar in red indicates where Graco's Piotroski F-Score falls in comparison to its industry or sector. The grey bar indicates the Piotroski F-Score's extreme value range as defined by GuruFocus.

How is the Piotroski F-Score calculated?

This Year (Mar23) TTM:

Last Year (Mar22) TTM:

Net Income was 117.378 + 116.232 + 126.192 + 129.166 = $489 Mil.
Cash Flow from Operations was 103.66 + 136.567 + 105.842 + 90.829 = $437 Mil.
Revenue was 548.547 + 545.644 + 555.045 + 529.646 = $2,179 Mil.
Gross Profit was 269.06 + 261.088 + 272.816 + 285.14 = $1,088 Mil.
Average Total Assets from the begining of this year (Mar22)
to the end of this year (Mar23) was
(2319.445 + 2404.278 + 2438.2 + 2438.9 + 2546.263) / 5 = $2429.4172 Mil.
Total Assets at the begining of this year (Mar22) was $2,319 Mil.
Long-Term Debt & Capital Lease Obligation was $96 Mil.
Total Current Assets was $1,288 Mil.
Total Current Liabilities was $382 Mil.

Net Income was 110.118 + 103.829 + 120.232 + 100.843 = $435 Mil.

Revenue was 507.164 + 486.696 + 539.619 + 494.285 = $2,028 Mil.
Gross Profit was 263.824 + 248.234 + 274.557 + 254.475 = $1,041 Mil.
Average Total Assets from the begining of last year (Mar21)
to the end of last year (Mar22) was
(2087.72 + 2229.205 + 2377.328 + 2443.198 + 2319.445) / 5 = $2291.3792 Mil.
Total Assets at the begining of last year (Mar21) was $2,088 Mil.
Long-Term Debt & Capital Lease Obligation was $99 Mil.
Total Current Assets was $1,197 Mil.
Total Current Liabilities was $402 Mil.

*Note: If the latest quarterly/semi-annual/annual total assets data is 0, then we will use previous quarterly/semi-annual/annual data for all the items in the balance sheet.

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.

Graco's current Net Income (TTM) was 489. ==> 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.

Graco's current Cash Flow from Operations (TTM) was 437. ==> 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 (Mar22)
	=	488.968	/	2319.445
	=	0.2108125

ROA (Last Year)	=	Net Income	/	Total Assets (Mar21)
	=	435.022	/	2087.72
	=	0.20837181

Graco's return on assets of this year was 0.2108125. Graco's return on assets of last year was 0.20837181. ==> 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.

Graco's current Net Income (TTM) was 489. Graco's current Cash Flow from Operations (TTM) was 437. ==> 437 <= 489 ==> CFROA <= ROA ==> Score 0.

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: Mar23)	=	Long-Term Debt & Capital Lease Obligation	/	Average Total Assets from Mar22 to Mar23
	=	96.384	/	2429.4172
	=	0.03967371

Gearing (Last Year: Mar22)	=	Long-Term Debt & Capital Lease Obligation	/	Average Total Assets from Mar21 to Mar22
	=	99.209	/	2291.3792
	=	0.04329663

Graco's gearing of this year was 0.03967371. Graco's gearing of last year was 0.04329663. ==> 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: Mar23)	=	Total Current Assets	/	Total Current Liabilities
	=	1288.461	/	381.698
	=	3.37560323

Current Ratio (Last Year: Mar22)	=	Total Current Assets	/	Total Current Liabilities
	=	1197.22	/	402.313
	=	2.97584219

Graco's current ratio of this year was 3.37560323. Graco's current ratio of last year was 2.97584219. ==> 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.

Graco's number of shares in issue this year was 171.676. Graco's number of shares in issue last year was 174.678. ==> There is smaller number of shares in issue this year, or the same. ==> Score 1.

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
	=	1088.104	/	2178.882
	=	0.49938638

Gross Margin (Last Year: TTM)	=	Gross Profit	/	Revenue
	=	1041.09	/	2027.764
	=	0.51341774

Graco's gross margin of this year was 0.49938638. Graco's gross margin of last year was 0.51341774. ==> 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	/	Total Assets at the Beginning of This Year (Mar22)
	=	2178.882	/	2319.445
	=	0.939398

Asset Turnover (Last Year)	=	Revenue	/	Total Assets at the Beginning of Last Year (Mar21)
	=	2027.764	/	2087.72
	=	0.97128159

Graco's asset turnover of this year was 0.939398. Graco's asset turnover of last year was 0.97128159. ==> 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

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

Graco has an F-score of 6 indicating the company's financial situation is typical for a stable company.

Graco (NYSE:GGG) Piotroski F-Score 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.

Graco Piotroski F-Score Related Terms

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Graco (NYSE:GGG) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Industrial Products » Graco Inc (NYSE:GGG) » Definitions » Piotroski F-Score

Comparable Companies

Traded in Other Exchanges

GA8:Germany

Address

88-11th Avenue Northeast, Minneapolis, MN, USA, 55413

Website

https://www.graco.com

Graco manufactures equipment used for managing fluids, coatings, and adhesives, specializing in difficult-to-handle materials. Graco's business is organized into three segments: industrial, process, and contractor. The Minnesota-based firm serves a wide range of end markets, including industrial, automotive, and construction, and its broad array of products include pumps, valves, meters, sprayers, and equipment used to apply coatings, sealants, and adhesives. The firm generated roughly $2 billion in sales and $531 million in operating income in 2021.

Executives

Laura L Evanson	officer: Executive VP, Marketing	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Claudio Merengo	officer: President, Worldwide Gema	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Inge Grasdal	officer: EVP, Corporate Development	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Anthony J Gargano	officer: President, Asia Pacific	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Joseph J Humke	officer: Executive Vice President	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Brett C Carter	director	414 NICOLLET MALL, 401-9, MINNEAPOLIS MN 55401
Kathryn L Schoenrock	officer: Executive Vice President	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Kevin J. Wheeler	director	A. O. SMITH CORPORATION, 500 TENNESSEE WALTZ PARKWAY, ASHLAND CITY TN 37015
Timothy R White	officer: President, EMEA	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Angela F Wordell	officer: Executive VP, Operations	88 11TH AVENUE NE, MINNEAPOLIS MN 55413
Emily White	director	C/O LULULEMON ATHLETICA INC., 1818 CORNWALL AVENUE, VANCOUVER A1 V6J 1C7
Jody H Feragen	director	1 HORMEL PLACE, AUSTIN TX 55912
Bernard J Moreau	officer: Vice President	88 - 11TH AVENUE N.E., MINNEAPOLIS MN 55413
Mark D Eberlein	officer: Vice President	88 - 11TH AVENUE N.E., MINNEAPOLIS MN 55413
Peter J O'shea	officer: Vice President	88 - 11TH AVENUE N.E., MINNEAPOLIS MN 55413