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Constellation Brands Inc  (NYSE:STZ) 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

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

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

2
9

During the past 13 years, the highest Piotroski F-Score of Constellation Brands Inc was 9. The lowest was 2. And the median was 6.


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.

Constellation Brands Inc Annual Data

Feb08 Feb09 Feb10 Feb11 Feb12 Feb13 Feb14 Feb15 Feb16 Feb17
Piotroski F-Score Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 6.00 5.00 6.00 7.00 6.00

Constellation Brands Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 7.00 6.00 6.00 7.00 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 (Aug17) TTM:Last Year (Aug16) TTM:
Net Income was 405.9 + 452 + 402.8 + 499.5 = $1,760 Mil.
Cash Flow from Operations was 370.8 + 280.3 + 381.6 + 721.3 = $1,754 Mil.
Revenue was 1810.5 + 1628 + 1935.5 + 2084.5 = $7,459 Mil.
Gross Profit was 891.4 + 787.7 + 995.3 + 1065.3 = $3,740 Mil.
Average Total Assets from the begining of this year (Aug16)
to the end of this year (Aug17) was
(17717.4 + 18320.1 + 18602.4 + 18959.4 + 19418.4) / 5 = $18603.54 Mil.
Total Assets at the begining of this year (Aug16) was $17,717 Mil.
Long-Term Debt & Capital Lease Obligation was $8,037 Mil.
Total Current Assets was $3,373 Mil.
Total Current Liabilities was $2,090 Mil.
Net Income was 270.5 + 243.4 + 318.3 + 358.9 = $1,191 Mil.

Revenue was 1640.5 + 1543.2 + 1871.8 + 2021.2 = $7,077 Mil.
Gross Profit was 733.5 + 696.1 + 881.3 + 969 = $3,280 Mil.
Average Net Income from the begining of last year (Aug15)
to the end of last year (Aug16) was
(15673.4 + 16156.6 + 16965 + 17630 + 17717.4) / 5 = $16828.48 Mil.
Total Assets at the begining of last year (Aug15) was $15,673 Mil.
Long-Term Debt & Capital Lease Obligation was $7,022 Mil.
Total Current Assets was $3,170 Mil.
Total Current Liabilities was $2,200 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.

Constellation Brands Inc's current Net Income (TTM) was 1,760. ==> 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.

Constellation Brands Inc's current Cash Flow from Operations (TTM) was 1,754. ==> 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(Aug16)
=1760.2/17717.4
=0.09934866

ROA (Last Year)=Net Income/Total Assets(Aug15)
=1191.1/15673.4
=0.075995

Constellation Brands Inc's return on assets of this year was 0.09934866. Constellation Brands Inc's return on assets of last year was 0.075995. ==> 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.

Constellation Brands Inc's current Net Income (TTM) was 1,760. Constellation Brands Inc's current Cash Flow from Operations (TTM) was 1,754. ==> 1,754 <= 1,760 ==> CFROA <= ROA ==> Score 0.

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: Aug17)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Aug16 to Aug17
=8036.9/18603.54
=0.43200918

Gearing (Last Year: Aug16)=Long-Term Debt & Capital Lease Obligation/Total Assetsfrom Aug15 to Aug16
=7021.6/16828.48
=0.41724505

Constellation Brands Inc's gearing of this year was 0.43200918. Constellation Brands Inc's gearing of last year was 0.41724505. ==> 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: Aug17)=Total Current Assets/Total Current Liabilities
=3373.4/2090
=1.61406699

Current Ratio (Last Year: Aug16)=Total Current Assets/Total Current Liabilities
=3169.8/2199.6
=1.4410802

Constellation Brands Inc's current ratio of this year was 1.61406699. Constellation Brands Inc's current ratio of last year was 1.4410802. ==> 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.

Constellation Brands Inc's number of shares in issue this year was 224.7. Constellation Brands Inc's number of shares in issue last year was 229. ==> 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
=3739.7/7458.5
=0.50140109

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=3279.9/7076.7
=0.46347874

Constellation Brands Inc's gross margin of this year was 0.50140109. Constellation Brands Inc's gross margin of last year was 0.46347874. ==> 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/Total Assets at the Beginning of This Year (Aug16)
=7458.5/17717.4
=0.42097035

Asset Turnover (Last Year)=Revenue/Total Assets at the Beginning of Last Year (Aug15)
=7076.7/15673.4
=0.4515102

Constellation Brands Inc's asset turnover of this year was 0.42097035. Constellation Brands Inc's asset turnover of last year was 0.4515102. ==> 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+1+0+0+1+1+1+0
=6

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

Constellation Brands 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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