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.
* 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.
Competitive Comparison of EQM Midstream Partners LP's Sloan Ratio %
For the Oil & Gas Midstream subindustry, EQM Midstream Partners LP'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.
EQM Midstream Partners LP's Sloan Ratio % Distribution in the Oil & Gas Industry
For the Oil & Gas industry and Energy sector, EQM Midstream Partners LP's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where EQM Midstream Partners LP's Sloan Ratio % falls into.
EQM Midstream Partners LP 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.
EQM Midstream Partners LP's Sloan Ratio for the fiscal year that ended in Dec. 2019 is calculated as
EQM Midstream Partners LP's Net Income for the trailing twelve months (TTM) ended in Mar. 2020 was 152.438 (Jun. 2019 ) + -10.518 (Sep. 2019 ) + -210.478 (Dec. 2019 ) + 251.678 (Mar. 2020 ) = $183 Mil.
EQM Midstream Partners LP's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2020 was 349.27 (Jun. 2019 ) + 234.584 (Sep. 2019 ) + 304.58 (Dec. 2019 ) + 285.136 (Mar. 2020 ) = $1,174 Mil.
EQM Midstream Partners LP's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2020 was -1324.948 (Jun. 2019 ) + -496.237 (Sep. 2019 ) + -458.091 (Dec. 2019 ) + -845.857 (Mar. 2020 ) = $-3,125 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.
EQM Midstream Partners LP (NYSE:EQM) 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 Mar. 2020, EQM Midstream Partners LP has a Sloan Ratio of 16.60%, indicating there is a warning stage of accrual build up.
EQM Midstream Partners LP Sloan Ratio % Related Terms
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EQM Midstream Partners LP (EQM Midstream Partners LP) Business Description
EQM Midstream Partners LP owns, operates, acquires and develops midstream assets in the Appalachian Basin. It provides midstream services to EQT and third parties in the Appalachian Basin across counties in Pennsylvania and West Virginia through two assets, the transmission, and storage system and the gathering system. The company's transmission and storage system included an approximately 700-mile Federal Energy Regulatory Commission (FERC)-regulated interstate pipeline that connects to five interstate pipelines and multiple distribution companies. The transmission system is supported by associated natural gas storage reservoirs with approximately 400 MMcf per day of peak withdrawal capacity and 32 Bcf of working gas capacity and 27 compressor units.
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