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GuruFocus has detected 3 Warning Signs with Helmerich & Payne Inc $HP.
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Helmerich & Payne Inc (NYSE:HP)
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

Helmerich & Payne Inc has an F-score of 3. It is a bad or low score, which usually implies poor business operation.

HP' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 9
Current: 3

3
9

During the past 13 years, the highest Piotroski F-Score of Helmerich & Payne Inc was 9. The lowest was 3. And the median was 6.


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 -21.2 + -72.835 + -35.063 + -48.818 = $-178 Mil.
Cash Flow from Operations was 122.893 + 138.187 + 70.668 + 75.691 = $407 Mil.
Revenue was 366.486 + 331.708 + 368.59 + 405.283 = $1,472 Mil.
Gross Profit was 180.34 + 117.304 + 120.911 + 108.454 = $527 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(7025.105 + 6976.519 + 6832.019 + 6677.637 + 6538.184) / 5 = $6809.8928 Mil.
Total Assets at the begining of this year (Mar16) was $7,025 Mil.
Long-Term Debt was $492 Mil.
Total Current Assets was $1,364 Mil.
Total Current Liabilities was $301 Mil.
Net Income was 90.872 + -27.596 + 16.002 + 21.205 = $100 Mil.

Revenue was 661.445 + 553.8 + 487.847 + 438.191 = $2,141 Mil.
Gross Profit was 310.805 + 227.526 + 211.203 + 216.58 = $966 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(7344.15 + 7335.817 + 7147.242 + 7130.274 + 7025.105) / 5 = $7196.5176 Mil.
Total Assets at the begining of last year (Mar15) was $7,344 Mil.
Long-Term Debt was $493 Mil.
Total Current Assets was $1,460 Mil.
Total Current Liabilities was $371 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.

Helmerich & Payne Inc's current net income (TTM) was -178. ==> 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.

Helmerich & Payne Inc's current cash flow from operations (TTM) was 407. ==> 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)
=-177.916/7025.105
=-0.02532574

ROA (Last Year)=Net Income (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=100.483/7344.15
=0.01368205

Helmerich & Payne Inc's return on assets of this year was -0.02532574. Helmerich & Payne Inc's return on assets of last year was 0.01368205. ==> 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.

Helmerich & Payne Inc's current net income (TTM) was -178. Helmerich & Payne Inc's current cash flow from operations (TTM) was 407. ==> 407 > -178 ==> 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
=492.373/6809.8928
=0.07230261

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=492.919/7196.5176
=0.0684941

Helmerich & Payne Inc's gearing of this year was 0.07230261. Helmerich & Payne Inc's gearing of last year was 0.0684941. ==> 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: Mar17)=Total Current Assets/Total Current Liabilities
=1363.887/301.417
=4.52491731

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=1460.377/371.328
=3.93284913

Helmerich & Payne Inc's current ratio of this year was 4.52491731. Helmerich & Payne Inc's current ratio of last year was 3.93284913. ==> 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.

Helmerich & Payne Inc's number of shares in issue this year was 108.6. Helmerich & Payne Inc's number of shares in issue last year was 108.5. ==> 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
=527.009/1472.067
=0.35800612

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=966.114/2141.283
=0.45118464

Helmerich & Payne Inc's gross margin of this year was 0.35800612. Helmerich & Payne Inc's gross margin of last year was 0.45118464. ==> 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 (Mar16)
=1472.067/7025.105
=0.20954377

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=2141.283/7344.15
=0.29156308

Helmerich & Payne Inc's asset turnover of this year was 0.20954377. Helmerich & Payne Inc's asset turnover of last year was 0.29156308. ==> 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

Helmerich & Payne Inc 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 local exchange's currency.

Helmerich & Payne Inc Annual Data

Sep07Sep08Sep09Sep10Sep11Sep12Sep13Sep14Sep15Sep16
Question 1 1111111110
Question 2 1111111111
Question 3 1000111000
Question 4 1111111111
Question 5 0111111100
Question 6 1101011011
Question 7 1010010011
Question 8 1010111110
Question 9 1000110100
F-score 8565797664

Helmerich & Payne Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 1111110000
Question 2 1111111111
Question 3 0000000000
Question 4 1111111111
Question 5 1000011000
Question 6 0111101111
Question 7 0111101110
Question 8 1111000000
Question 9 1100000000
F-score 6766545443
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