Switch to:
GuruFocus has detected 4 Warning Signs with Nasdaq Inc $NDAQ.
More than 500,000 people have already joined GuruFocus to track the stocks they follow and exchange investment ideas.
Nasdaq Inc (NAS:NDAQ)
Piotroski F-Score
4 (As of Today)

The zones of discrimination were as such:

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

Nasdaq Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.

NDAQ' s Piotroski F-Score Range Over the Past 10 Years
Min: 3   Max: 8
Current: 4

3
8

During the past 13 years, the highest Piotroski F-Score of Nasdaq Inc was 8. 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 70 + 131 + -225 + 169 = $145 Mil.
Cash Flow from Operations was 137 + 61 + 269 + 244 = $711 Mil.
Revenue was 897 + 929 + 973 + 971 = $3,770 Mil.
Gross Profit was 559 + 585 + 599 + 583 = $2,326 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(13717 + 15099 + 14808 + 14150 + 14490) / 5 = $14452.8 Mil.
Total Assets at the begining of this year (Mar16) was $13,717 Mil.
Long-Term Debt was $3,242 Mil.
Total Current Assets was $4,947 Mil.
Total Current Liabilities was $4,886 Mil.
Net Income was 133 + 138 + 148 + 132 = $551 Mil.

Revenue was 807 + 871 + 865 + 905 = $3,448 Mil.
Gross Profit was 518 + 529 + 536 + 534 = $2,117 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(12242 + 12104 + 11770 + 11861 + 13717) / 5 = $12338.8 Mil.
Total Assets at the begining of last year (Mar15) was $12,242 Mil.
Long-Term Debt was $2,565 Mil.
Total Current Assets was $4,722 Mil.
Total Current Liabilities was $4,429 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.

Nasdaq Inc's current net income (TTM) was 145. ==> 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.

Nasdaq Inc's current cash flow from operations (TTM) was 711. ==> 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.

Nasdaq Inc's return on assets of this year was 0.01057082. Nasdaq Inc's return on assets of last year was 0.04500899. ==> 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.

Nasdaq Inc's current net income (TTM) was 145. Nasdaq Inc's current cash flow from operations (TTM) was 711. ==> 711 > 145 ==> 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
=3242/14452.8
=0.2243164

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=2565/12338.8
=0.20788083

Nasdaq Inc's gearing of this year was 0.2243164. Nasdaq Inc's gearing of last year was 0.20788083. ==> 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
=4947/4886
=1.01248465

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=4722/4429
=1.06615489

Nasdaq Inc's current ratio of this year was 1.01248465. Nasdaq Inc's current ratio of last year was 1.06615489. ==> 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.

Nasdaq Inc's number of shares in issue this year was 170.2. Nasdaq Inc's number of shares in issue last year was 168.4. ==> 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
=2326/3770
=0.61697613

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=2117/3448
=0.61397912

Nasdaq Inc's gross margin of this year was 0.61697613. Nasdaq Inc's gross margin of last year was 0.61397912. ==> 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)
=3770/13717
=0.27484144

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=3448/12242
=0.28165332

Nasdaq Inc's asset turnover of this year was 0.27484144. Nasdaq Inc's asset turnover of last year was 0.28165332. ==> 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+0+0+0+1+0
=4

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

Nasdaq Inc has an F-score of 4 indicating the company's financial situation is typical for a stable company.


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.

Nasdaq Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1111111111
Question 2 1111111111
Question 3 1001011010
Question 4 0011111111
Question 5 1010100100
Question 6 0010110101
Question 7 0011110110
Question 8 0111111111
Question 9 0101011011
F-score 4477786776

Nasdaq Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 1111111111
Question 2 1111111111
Question 3 0000111100
Question 4 1111111111
Question 5 1010000000
Question 6 1110000010
Question 7 1111111100
Question 8 1000111111
Question 9 0000111110
F-score 7564777764
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK