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.
Pilgrims Pride's Sloan Ratio for the quarter that ended in Dec. 2023 was 1.50%.
As of Dec. 2023, Pilgrims Pride has a Sloan Ratio of 1.50%, indicating the company is in the safe zone and there is no funny business with accruals.
Pilgrims Pride Sloan Ratio % Historical Data
The historical data trend for Pilgrims Pride'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.
Competitive Comparison of Pilgrims Pride's Sloan Ratio %
For the Packaged Foods subindustry, Pilgrims Pride'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.
Pilgrims Pride's Sloan Ratio % Distribution in the Consumer Packaged Goods Industry
For the Consumer Packaged Goods industry and Consumer Defensive sector, Pilgrims Pride's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Pilgrims Pride's Sloan Ratio % falls into.
Pilgrims Pride 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.
Pilgrims Pride's Sloan Ratio for the fiscal year that ended in Dec. 2023 is calculated as
Pilgrims Pride's Net Income for the trailing twelve months (TTM) ended in Dec. 2023 was 5.187 (Mar. 2023 ) + 60.456 (Jun. 2023 ) + 121.278 (Sep. 2023 ) + 134.653 (Dec. 2023 ) = $322 Mil.
Pilgrims Pride's Cash Flow from Operations for the trailing twelve months (TTM) ended in Dec. 2023 was -161.704 (Mar. 2023 ) + 251.045 (Jun. 2023 ) + 310.257 (Sep. 2023 ) + 278.279 (Dec. 2023 ) = $678 Mil.
Pilgrims Pride's Cash Flow from Investing for the trailing twelve months (TTM) ended in Dec. 2023 was -117.471 (Mar. 2023 ) + -133.47 (Jun. 2023 ) + -143.529 (Sep. 2023 ) + -108.881 (Dec. 2023 ) = $-503 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.
Pilgrims Pride (NAS:PPC) 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 Dec. 2023, Pilgrims Pride has a Sloan Ratio of 1.50%, indicating the company is in the safe zone and there is no funny business with accruals.
Pilgrims Pride Sloan Ratio % Related Terms
Thank you for viewing the detailed overview of Pilgrims Pride's Sloan Ratio % provided by GuruFocus.com. Please click on the following links to see related term pages.
Pilgrims Pride (Pilgrims Pride) Business Description
Pilgrim's Pride is the second-largest poultry producer in the U.S. (62% of 2022 sales), the U.K. (28% including other European sales), and Mexico (11%). Its U.K. and European arm also includes pork operations from the 2019 acquisition of Tulip. Pilgrim's sells to chain restaurants, food processors, food distributors, and retail chains. Most of its U.S. and Mexican sales come from fresh chicken, while prepared chicken and pork constitute most of its U.K. and European sales. JBS owns more than 80% of Pilgrim's Pride's outstanding shares, though it failed to acquire the remaining stake in 2021 after a special board committee deemed JBS' offer undervalued Pilgrim's Pride.
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