Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
Energen's Sloan Ratio for the quarter that ended in Sep. 2018 was 10.31%.
As of Sep. 2018, Energen has a Sloan Ratio of 10.31%, indicating there is a warning stage of accrual build up.
Energen Sloan Ratio % Historical Data
The historical data trend for Energen's Sloan Ratio % 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.
For the Oil & Gas E&P subindustry, Energen's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* 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. Note that "N/A" values will not show up in the chart.
Energen's Sloan Ratio % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, Energen's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Energen's Sloan Ratio % falls into.
Energen Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Energen's Sloan Ratio for the fiscal year that ended in Dec. 2017 is calculated as
Energen's Net Income for the trailing twelve months (TTM) ended in Sep. 2018 was 262.43 (Dec. 2017 ) + 118.915 (Mar. 2018 ) + 68.274 (Jun. 2018 ) + -26.572 (Sep. 2018 ) = $423 Mil.
Energen's Cash Flow from Operations for the trailing twelve months (TTM) ended in Sep. 2018 was 186.586 (Dec. 2017 ) + 255.83 (Mar. 2018 ) + 205.607 (Jun. 2018 ) + 301.671 (Sep. 2018 ) = $950 Mil.
Energen's Cash Flow from Investing for the trailing twelve months (TTM) ended in Sep. 2018 was -203.399 (Dec. 2017 ) + -222.176 (Mar. 2018 ) + -279.722 (Jun. 2018 ) + -411.47 (Sep. 2018 ) = $-1,117 Mil.
* 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.
Energen (NYSE:EGN) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Sep. 2018, Energen has a Sloan Ratio of 10.31%, indicating there is a warning stage of accrual build up.
Energen Sloan Ratio % Related Terms
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Energen Corp is an exploration and production company focused on the exploration, development, and production of oil, natural gas liquids, and natural gas. Its core business is centered around increasing production and adding proven reserves. In addition, the company explores for and develops new reservoirs, primarily in areas which it has an existing presence. Traditionally, all of the oil, natural gas liquids, and natural gas is sold to third parties. Energen has expanded proven reserves from regulatory approvals for drilling unit downspacing. This approval increases the number of available drilling locations, changes the operating environments, technology enhancements, and increases knowledge of field geology and engineering parameters relative to oil and natural gas reservoirs.
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