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GuruFocus has detected 3 Warning Signs with Group 1 Automotive Inc $GPI.
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Group 1 Automotive Inc (NYSE:GPI)
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 = 7, 8, 9
Bad or low score = 0, 1, 2, 3

Group 1 Automotive Inc has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

GPI' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 7

3
8

During the past 13 years, the highest Piotroski F-Score of Group 1 Automotive Inc was 8. The lowest was 3. 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 local exchange's currency.

This Year (Mar17) TTM:Last Year (Mar16) TTM:
Net Income was 46.58 + 35.366 + 30.828 + 33.939 = $147 Mil.
Cash Flow from Operations was 56.792 + 213.745 + -1.755 + 71.561 = $340 Mil.
Revenue was 2782.449 + 2823.176 + 2673.632 + 2518.829 = $10,798 Mil.
Gross Profit was 410.119 + 406.668 + 389.181 + 383.522 = $1,589 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(4533.846 + 4500.8 + 4421.064 + 4461.903 + 4489.363) / 5 = $4481.3952 Mil.
Total Assets at the begining of this year (Mar16) was $4,534 Mil.
Long-Term Debt was $1,225 Mil.
Total Current Assets was $2,153 Mil.
Total Current Liabilities was $2,021 Mil.
Net Income was 46.31 + 45.261 + -33.386 + 34.291 = $92 Mil.

Revenue was 2726.48 + 2800.569 + 2672.602 + 2608.355 = $10,808 Mil.
Gross Profit was 391.573 + 398.382 + 380.133 + 389.101 = $1,559 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(4098.467 + 4302.974 + 4292.05 + 4396.716 + 4533.846) / 5 = $4324.8106 Mil.
Total Assets at the begining of last year (Mar15) was $4,098 Mil.
Long-Term Debt was $1,257 Mil.
Total Current Assets was $2,254 Mil.
Total Current Liabilities was $2,103 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.

Group 1 Automotive Inc's current net income (TTM) was 147. ==> 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.

Group 1 Automotive Inc's current cash flow from operations (TTM) was 340. ==> 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 (Mar16)
=146.713/4533.846
=0.0323595

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=92.476/4098.467
=0.02256356

Group 1 Automotive Inc's return on assets of this year was 0.0323595. Group 1 Automotive Inc's return on assets of last year was 0.02256356. ==> 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.

Group 1 Automotive Inc's current net income (TTM) was 147. Group 1 Automotive Inc's current cash flow from operations (TTM) was 340. ==> 340 > 147 ==> 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: Mar17)=Long-Term Debt/Average Total Assets from Mar16 to Mar17
=1224.718/4481.3952
=0.27328944

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=1256.679/4324.8106
=0.29057434

Group 1 Automotive Inc's gearing of this year was 0.27328944. Group 1 Automotive Inc's gearing of last year was 0.29057434. ==> 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: Mar17)=Total Current Assets/Total Current Liabilities
=2153.077/2021.275
=1.06520736

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=2254.079/2103.353
=1.07165987

Group 1 Automotive Inc's current ratio of this year was 1.06520736. Group 1 Automotive Inc's current ratio of last year was 1.07165987. ==> Last year's current ratio is higher ==> Score 0.

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.

Group 1 Automotive Inc's number of shares in issue this year was 20.7. Group 1 Automotive Inc's number of shares in issue last year was 22.5. ==> 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
=1589.49/10798.086
=0.14720109

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=1559.189/10808.006
=0.14426241

Group 1 Automotive Inc's gross margin of this year was 0.14720109. Group 1 Automotive Inc's gross margin of last year was 0.14426241. ==> 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 (TTM)/Total Assets at the Beginning of This Year (Mar16)
=10798.086/4533.846
=2.3816614

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=10808.006/4098.467
=2.63708504

Group 1 Automotive Inc's asset turnover of this year was 2.3816614. Group 1 Automotive Inc's asset turnover of last year was 2.63708504. ==> 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
=1+1+1+1+1+0+1+1+0
=7

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

Group 1 Automotive Inc has an F-score of 7. 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.


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 local exchange's currency.

Group 1 Automotive Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1011111111
Question 2 1110101111
Question 3 0011110001
Question 4 0110100111
Question 5 0111011001
Question 6 0010000110
Question 7 1001100111
Question 8 0110000101
Question 9 0001010000
F-score 3475543657

Group 1 Automotive Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 1111111111
Question 2 1111111111
Question 3 0011000011
Question 4 1111111111
Question 5 0010000011
Question 6 1100100100
Question 7 1111111111
Question 8 1110001111
Question 9 0000000000
F-score 6675545677
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