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NewStar Financial (NewStar Financial) Piotroski F-Score

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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

NewStar Financial has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

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


NewStar Financial Piotroski F-Score Historical Data

The historical data trend for NewStar Financial'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.

NewStar Financial Annual Data
Trend Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Piotroski F-Score
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - - -

NewStar Financial Quarterly Data
Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17 Sep17
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 - - - - -

How is the Piotroski F-Score calculated?

* 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.

This Year (Sep17) TTM:Last Year (Sep16) TTM:
Net Income was 10.33 + 1.382 + 4.152 + 4.585 = $20.4 Mil.
Cash Flow from Operations was 290.43 + -135.646 + -84.675 + 15.947 = $86.1 Mil.
Revenue was 40.471 + 20.139 + 20.187 + 21.13 = $101.9 Mil.
Average Total Assets from the begining of this year (Sep16)
to the end of this year (Sep17) was
(4403.36 + 4040.592 + 3985.701 + 3931.395 + 4002.634) / 5 = $4072.7364 Mil.
Total Assets at the begining of this year (Sep16) was $4,403.4 Mil.
Long-Term Debt & Capital Lease Obligation was $3,181.9 Mil.
Total Assets was $4,002.6 Mil.
Total Liabilities was $3,356.9 Mil.
Net Income was 4.209 + 4.009 + 5.241 + 8.644 = $22.1 Mil.

Revenue was 27.679 + 41.671 + 25.265 + 36.224 = $130.8 Mil.
Average Total Assets from the begining of last year (Sep15)
to the end of last year (Sep16) was
(3869.279 + 4051.383 + 4007.944 + 3991.861 + 4403.36) / 5 = $4064.7654 Mil.
Total Assets at the begining of last year (Sep15) was $3,869.3 Mil.
Long-Term Debt & Capital Lease Obligation was $3,433.5 Mil.
Total Assets was $4,403.4 Mil.
Total Liabilities was $3,731.6 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.

NewStar Financial's current Net Income (TTM) was 20.4. ==> 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.

NewStar Financial's current Cash Flow from Operations (TTM) was 86.1. ==> 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 (Sep16)
=20.449/4403.36
=0.00464395

ROA (Last Year)=Net Income/Total Assets (Sep15)
=22.103/3869.279
=0.00571243

NewStar Financial's return on assets of this year was 0.00464395. NewStar Financial's return on assets of last year was 0.00571243. ==> 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.

NewStar Financial's current Net Income (TTM) was 20.4. NewStar Financial's current Cash Flow from Operations (TTM) was 86.1. ==> 86.1 > 20.4 ==> 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: Sep17)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Sep16 to Sep17
=3181.883/4072.7364
=0.78126416

Gearing (Last Year: Sep16)=Long-Term Debt & Capital Lease Obligation/Average Total Assets from Sep15 to Sep16
=3433.48/4064.7654
=0.84469328

NewStar Financial's gearing of this year was 0.78126416. NewStar Financial's gearing of last year was 0.84469328. ==> 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

* Note that for banks and insurance companies, there's no Total Current Assets and Total Current Liabilities reported. Thus, we use Total Assets and Total Liabilities to calculate current ratio for banks and insurance companies.

Current Ratio (This Year: Sep17)=Total Assets/Total Liabilities
=4002.634/3356.882
=1.19236661

Current Ratio (Last Year: Sep16)=Total Assets/Total Liabilities
=4403.36/3731.63
=1.18000981

NewStar Financial's current ratio of this year was 1.19236661. NewStar Financial's current ratio of last year was 1.18000981. ==> 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.

NewStar Financial's number of shares in issue this year was 40.807. NewStar Financial's number of shares in issue last year was 45.812. ==> 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.

* Note that for banks and insurance companies, there's no Gross Profit reported. Thus, we use net income instead of gross profit and calculate Net Margin for this score.

Net Margin (This Year: TTM)=Net Income/Revenue
=20.449/101.927
=0.20062398

Net Margin (Last Year: TTM)=Net Income/Revenue
=22.103/130.839
=0.16893281

NewStar Financial's net margin of this year was 0.20062398. NewStar Financial's net margin of last year was 0.16893281. ==> This year's net 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 (Sep16)
=101.927/4403.36
=0.02314755

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Sep15)
=130.839/3869.279
=0.03381483

NewStar Financial's asset turnover of this year was 0.02314755. NewStar Financial's asset turnover of last year was 0.03381483. ==> 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+1+1+0
=7

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

NewStar Financial has an F-score of 7. It is a good or high score, which usually indicates a very healthy situation.

NewStar Financial  (NAS:NEWS) 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.


NewStar Financial Piotroski F-Score Related Terms

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NewStar Financial (NewStar Financial) Business Description

Traded in Other Exchanges
N/A
Address
NewStar Financial Inc is a finance company which develops specialized platforms for complex financing needs of companies and private investors for the middle market. The company and its subsidiary provides asset management services to institutional customers and also manages private credit funds, sponsored funds, series of funds structured as CLOs and managed accounts. Through specialized lending platforms the company provides senior secured debt financing options to mid-sized companies to fund working capital growth strategies, acquisitions, recapitalizations, purchases of equipment and other capital assets. The company derives its revenues from leveraged finance, business credit, real estate, equipment finance and asset management segments.
Executives
Richard E Thornburgh director 401 N. MAIN STREET, WINSTON-SALEM NC 27101
Frank R Noonan director
Bradley E Cooper director UNIVERSAL AMERICAN FINANCIAL CORP, 6 INTERNATIONAL DR STE 190, RYE BROOK NY 10573
Capital Z Financial Services Fund Ii Lp 10 percent owner
Capital Z Partners Ltd 10 percent owner
Capital Z Partners Lp 10 percent owner
Corsair Capital Llc 10 percent owner 717 FIFTH AVENUE, 24TH FLOOR, NEW YORK NY 10022
Second Curve Capital Llc 10 percent owner 150 N RADNOR CHESTER ROAD, SUITE F120, RADNOR PA 19087
Thomas K Brown 10 percent owner C/O SECOND CURVE CAPITAL, LLC, 237 PARK AVENUE, 9TH FLOOR, NEW YORK NY 10017
Mark K Gormley director 1067 FIFTH AVENUE, #6, NEW YORK NY 10128
Burnaman Phillip R Ii officer: M.Dir & Head Structured Prods
Joseph W Saunders director C/O VISA INC., P.O. BOX 8999, SAN FRANCISCO CA 94128-8999

NewStar Financial (NewStar Financial) Headlines

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