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GuruFocus has detected 2 Warning Signs with United Continental Holdings Inc $UAL.
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United Continental Holdings Inc (NYSE:UAL)
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

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

UAL' s Piotroski F-Score Range Over the Past 10 Years
Min: 1   Max: 8
Current: 6

1
8

During the past 13 years, the highest Piotroski F-Score of United Continental Holdings Inc was 8. The lowest was 1. 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 588 + 965 + 397 + 96 = $2,046 Mil.
Cash Flow from Operations was 2547 + 1138 + 658 + 547 = $4,890 Mil.
Revenue was 9396 + 9913 + 9052 + 8420 = $36,781 Mil.
Gross Profit was 6244 + 6573 + 5785 + 5147 = $23,749 Mil.
Average Total Assets from the begining of this year (Mar16)
to the end of this year (Mar17) was
(40373 + 40476 + 40327 + 40140 + 41445) / 5 = $40552.2 Mil.
Total Assets at the begining of this year (Mar16) was $40,373 Mil.
Long-Term Debt was $12,014 Mil.
Total Current Assets was $7,724 Mil.
Total Current Liabilities was $12,662 Mil.
Net Income was 1193 + 4816 + 823 + 313 = $7,145 Mil.

Revenue was 9914 + 10306 + 9036 + 8195 = $37,451 Mil.
Gross Profit was 6047 + 6640 + 5724 + 5350 = $23,761 Mil.
Average Total Assets from the begining of last year (Mar15)
to the end of last year (Mar16) was
(39091 + 39367 + 41869 + 40861 + 40373) / 5 = $40312.2 Mil.
Total Assets at the begining of last year (Mar15) was $39,091 Mil.
Long-Term Debt was $10,197 Mil.
Total Current Assets was $7,224 Mil.
Total Current Liabilities was $13,380 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.

United Continental Holdings Inc's current net income (TTM) was 2,046. ==> 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.

United Continental Holdings Inc's current cash flow from operations (TTM) was 4,890. ==> 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.

United Continental Holdings Inc's return on assets of this year was 0.05067743. United Continental Holdings Inc's return on assets of last year was 0.18277864. ==> 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.

United Continental Holdings Inc's current net income (TTM) was 2,046. United Continental Holdings Inc's current cash flow from operations (TTM) was 4,890. ==> 4,890 > 2,046 ==> 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
=12014/40552.2
=0.29626013

Gearing (Last Year: Mar16)=Long-Term Debt/Average Total Assets from Mar15 to Mar16
=10197/40312.2
=0.25295072

United Continental Holdings Inc's gearing of this year was 0.29626013. United Continental Holdings Inc's gearing of last year was 0.25295072. ==> 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
=7724/12662
=0.61001422

Current Ratio (Last Year: Mar16)=Total Current Assets/Total Current Liabilities
=7224/13380
=0.53991031

United Continental Holdings Inc's current ratio of this year was 0.61001422. United Continental Holdings Inc's current ratio of last year was 0.53991031. ==> 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.

United Continental Holdings Inc's number of shares in issue this year was 314.6. United Continental Holdings Inc's number of shares in issue last year was 354.6. ==> 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
=23749/36781
=0.64568663

Gross Margin (Last Year: TTM)=Gross Profit/Revenue
=23761/37451
=0.63445569

United Continental Holdings Inc's gross margin of this year was 0.64568663. United Continental Holdings Inc's gross margin of last year was 0.63445569. ==> 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)
=36781/40373
=0.91102965

Asset Turnover (Last Year)=Revenue (TTM)/Total Assets at the Beginning of Last Year (Mar15)
=37451/39091
=0.95804661

United Continental Holdings Inc's asset turnover of this year was 0.91102965. United Continental Holdings Inc's asset turnover of last year was 0.95804661. ==> 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+1+1+1+0
=6

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

United Continental Holdings 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.


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.

United Continental Holdings Inc Annual Data

Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Question 1 1001101111
Question 2 1011111111
Question 3 0011101110
Question 4 1111111101
Question 5 1000101110
Question 6 0011100010
Question 7 0100010111
Question 8 0010010011
Question 9 0111011100
F-score 4366656775

United Continental Holdings Inc Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Question 1 1111111111
Question 2 1111111111
Question 3 1111111000
Question 4 1110000111
Question 5 1111111100
Question 6 0101100001
Question 7 1011111111
Question 8 0111111111
Question 9 1100000000
F-score 7877766656
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