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Renewable Energy Group Inc  (NAS:REGI) Piotroski F-Score: 6 (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

Renewable Energy Group Inc has an F-score of 6 indicating the company's financial situation is typical for a stable company.

NAS:REGI' s Piotroski F-Score Range Over the Past 10 Years
Min: 2   Max: 9
Current: 6

2
9

During the past 9 years, the highest Piotroski F-Score of Renewable Energy Group Inc was 9. The lowest was 2. And the median was 5.


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Renewable Energy Group Inc Annual Data

Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.00 6.00 2.00 3.00 9.00

Renewable Energy Group Inc Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
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 4.00 7.00 9.00 6.00 6.00

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.

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 (Jun17) TTM:Last Year (Jun16) TTM:
Net Income was 23.442 + 20.197 + -15.914 + -34.809 = $-7 Mil.
Cash Flow from Operations was 77.678 + 4.165 + 21.976 + -23.462 = $80 Mil.
Revenue was 624.64 + 560.421 + 418.893 + 535.103 = $2,139 Mil.
Gross Profit was 47.348 + 81.92 + 17.283 + 30.113 = $177 Mil.
Average Total Assets from the begining of this year (Jun16)
to the end of this year (Jun17) was
(1153.49 + 1020.114 + 1136.603 + 1041.087 + 1060.515) / 5 = $1082.3618 Mil.
Total Assets at the begining of this year ({FiscalYear0}) was $1,153 Mil.
Long-Term Debt & Capital Lease Obligation was $257 Mil.
Total Current Assets was $379 Mil.
Total Current Liabilities was $198 Mil.
Total Assets was -15.675 + -95.609 + -6.918 + 7.606 = $-111 Mil.

Revenue was 394.856 + 387.808 + 297.87 + 558.301 = $1,639 Mil.
Gross Profit was 4.405 + 105.659 + 17.384 + 24.862 = $152 Mil.
Average Total Assets from the begining of last year (Jun15)
to the end of last year (Jun16) was
(1153.404 + 1172.227 + 1223.62 + 1224.357 + 1153.49) / 5 = $1185.4196 Mil.
Total Assets at the begining of last year (Jun15) was $1,153 Mil.
Long-Term Debt & Capital Lease Obligation was $349 Mil.
Total Current Assets was $374 Mil.
Total Current Liabilities was $168 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.

Renewable Energy Group Inc's current Net Income (TTM) was {NetIncome0_f}. ==> 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.

Renewable Energy Group Inc's current Cash Flow from Operations (TTM) was 80. ==> 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(Jun16)
=-7.084/1153.49
=-0.00614136

ROA (Last Year)=Net Income/Total Assets(Jun15)
=-110.596/1153.404
=-0.09588661

Renewable Energy Group Inc's return on assets of this year was -0.00614136. Renewable Energy Group Inc's return on assets of last year was -0.09588661. ==> 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.

Renewable Energy Group Inc's current Net Income (TTM) was -7. Renewable Energy Group Inc's current Cash Flow from Operations (TTM) was 80. ==> 80 > -7 ==> 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: Jun17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun16 to Jun17
=256.578/1082.3618
=0.23705382

Gearing (Last Year: Jun16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Jun15 to Jun16
=349.349/1185.4196
=0.29470493

Renewable Energy Group Inc's gearing of this year was 0.23705382. Renewable Energy Group Inc's gearing of last year was 0.29470493. ==> 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: Jun17)=Total Current Assets/Total Current Liabilities
=378.673/198.421
=1.90843207

Current Ratio (Last Year: Jun16)=Total Current Assets/Total Current Liabilities
=374.489/167.973
=2.2294595

Renewable Energy Group Inc's current ratio of this year was 1.90843207. Renewable Energy Group Inc's current ratio of last year was 2.2294595. ==> 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.

Renewable Energy Group Inc's number of shares in issue this year was 38.7. Renewable Energy Group Inc's number of shares in issue last year was 42.4. ==> 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
=176.664/2139.057
=0.08258966

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=152.31/1638.835
=0.09293797

Renewable Energy Group Inc's gross margin of this year was 0.08258966. Renewable Energy Group Inc's gross margin of last year was 0.09293797. ==> 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 (Jun16)
=2139.057/1153.49
=1.8544218

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Jun15)
=1638.835/1153.404
=1.42086814

Renewable Energy Group Inc's asset turnover of this year was 1.8544218. Renewable Energy Group Inc's asset turnover of last year was 1.42086814. ==> This year's asset turnover is higher. ==> Score 1.

Evaluation

Piotroski F-Score= Que. 1+ Que. 2+ Que. 3+Que. 4+Que. 5+Que. 6+Que. 7+Que. 8+Que. 9
=0+1+1+1+1+0+1+0+1
=6

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

Renewable Energy Group Inc has an F-score of 6 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.


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