"The Piotroski F-Score has been the only positive screener that has consistently done well over time despite 2018 market conditions. End of November results show it at 8.32% vs 2.9% for the S&P. Other “pure” value strategies continue to struggle in 2018. The dip in November hasn’t helped."
What is the Piotroski Score?
The Piotroski Score is named after its creator, Joseph Piotroski, a professor from Columbia university. It is a score used to evaluate the financial performance of a company and is based on 9 financial metrics that cover Profitability, Efficiency and Funding.
Why is the Piotroski Score useful?
The usefulness of the Piotroski score is in its ability to filter companies when screening stocks. Stocks with a high Piotroski score have shown to produce relatively better returns than the market due to its quality rating factors.
Most of the measures contained incorporate looking at year on year change which indicates the direction of relevant key metrics, rather than just the absolute value.
How is the Piotroski Score calculated?
Looking at nine financial metrics, the Piotroski score assigns a point to each metric. These metrics are:
Are earnings positive?
Is operating cash flow positive?
Has return on assets increased year on year?
Is the cash flow from operations more than return on assets for the year?
Is the long-term debt ratio lower than last year?
Has the current ratio increase from last year?
Has the company issued new shares?
Has the gross margin increase from last year?
Has the asset turnover ratio increase from last year?
fintastic Data Piotroski dashboards
We have calculated the Piotroski scores for all companies based on the financial statement data available. This will help investors screen stocks for the market without having to do all the background work. Furthermore, we show the breakdown of the score to help enhance understanding of the stock.