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Balchem Piotroski F-Score

: 5 (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

Balchem has an F-score of 5 indicating the company's financial situation is typical for a stable company.

NAS:BCPC' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Med: 5   Max: 8
Current: 5

1
8

During the past 13 years, the highest Piotroski F-Score of Balchem was 8. The lowest was 1. And the median was 5.


Balchem Piotroski F-Score Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.

* Premium members only.

Balchem Annual Data
Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.00 5.00 6.00 5.00 5.00

Balchem Quarterly Data
Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20
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 5.00 7.00 7.00 5.00 5.00

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.


Balchem Piotroski F-Score Distribution

* The bar in red indicates where Balchem's Piotroski F-Score falls into.


How is the Piotroski F-Score calculated?

* All numbers are in millions except for per share data and ratio. All numbers are indicated in the company's associated stock exchange currency.

This Year (Dec20) TTM:Last Year (Dec19) TTM:
Net Income was 19.768 + 21.125 + 21.568 + 22.162 = $84.6 Mil.
Cash Flow from Operations was 22.565 + 44.615 + 35.36 + 47.954 = $150.5 Mil.
Revenue was 174.436 + 173.355 + 175.14 + 180.713 = $703.6 Mil.
Gross Profit was 55.331 + 55.38 + 56.368 + 56.818 = $223.9 Mil.
Average Total Assets from the begining of this year (Dec19)
to the end of this year (Dec20) was
(1155.682 + 1162.112 + 1151.256 + 1161.341 + 1165.843) / 5 = $1159.2468 Mil.
Total Assets at the begining of this year (Dec19) was $1,155.7 Mil.
Long-Term Debt & Capital Lease Obligation was $169.6 Mil.
Total Current Assets was $266.9 Mil.
Total Current Liabilities was $94.4 Mil.
Net Income was 18.783 + 19.829 + 20.676 + 20.383 = $79.7 Mil.

Revenue was 157.029 + 161.554 + 158.595 + 166.527 = $643.7 Mil.
Gross Profit was 49.095 + 53.918 + 54.008 + 54.346 = $211.4 Mil.
Average Total Assets from the begining of last year (Dec18)
to the end of last year (Dec19) was
(981.355 + 971.888 + 1098.32 + 1096.628 + 1155.682) / 5 = $1060.7746 Mil.
Total Assets at the begining of last year (Dec18) was $981.4 Mil.
Long-Term Debt & Capital Lease Obligation was $253.4 Mil.
Total Current Assets was $254.9 Mil.
Total Current Liabilities was $92.3 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.

Balchem's current Net Income (TTM) was 84.6. ==> 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.

Balchem's current Cash Flow from Operations (TTM) was 150.5. ==> 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 (Dec19)
=84.623/1155.682
=0.07322343

ROA (Last Year)=Net Income/Total Assets (Dec18)
=79.671/981.355
=0.08118469

Balchem's return on assets of this year was 0.07322343. Balchem's return on assets of last year was 0.08118469. ==> 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.

Balchem's current Net Income (TTM) was 84.6. Balchem's current Cash Flow from Operations (TTM) was 150.5. ==> 150.5 > 84.6 ==> 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: Dec20)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Dec19 to Dec20
=169.648/1159.2468
=0.1463433

Gearing (Last Year: Dec19)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Dec18 to Dec19
=253.396/1060.7746
=0.23887827

Balchem's gearing of this year was 0.1463433. Balchem's gearing of last year was 0.23887827. ==> 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: Dec20)=Total Current Assets/Total Current Liabilities
=266.888/94.428
=2.82636506

Current Ratio (Last Year: Dec19)=Total Current Assets/Total Current Liabilities
=254.946/92.258
=2.76340263

Balchem's current ratio of this year was 2.82636506. Balchem's current ratio of last year was 2.76340263. ==> 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.

Balchem's number of shares in issue this year was 32.512. Balchem's number of shares in issue last year was 32.478. ==> 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
=223.897/703.644
=0.31819642

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=211.367/643.705
=0.32836004

Balchem's gross margin of this year was 0.31819642. Balchem's gross margin of last year was 0.32836004. ==> 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 (Dec19)
=703.644/1155.682
=0.60885607

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Dec18)
=643.705/981.355
=0.65593491

Balchem's asset turnover of this year was 0.60885607. Balchem's asset turnover of last year was 0.65593491. ==> 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+0+1+1+1+0+0+0
=5

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

Balchem has an F-score of 5 indicating the company's financial situation is typical for a stable company.

Balchem  (NAS:BCPC) 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.


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