Last update on 2024-06-07

Energiekontor (EKT.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 9/9)

Piotroski F-Score Analysis for Energiekontor (EKT.DE) in 2023 shows a strong financial position with a 9/9 score, highlighting profitability and operational efficiency.

Short Analysis - Piotroski Score: 9

We're running Energiekontor (EKT.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Energiekontor (EKT.DE) has a Piotroski F-Score of 9, which is the highest possible score, indicating strong financial health. Key highlights include positive net income and cash flow from operations, increased return on assets (ROA) and current ratio, improved gross margins, and efficient asset turnover. The only concern is the unexpected drop to zero outstanding shares which needs further investigation.

Insights for Value Investors Seeking Stable Income

With a Piotroski F-Score of 9 out of 9, Energiekontor is highly recommended for further consideration by investors. The company's strong financial indicators in profitability, liquidity, and operational efficiency suggest it is a solid investment. However, potential investors should investigate the unusual report of zero outstanding shares to ensure it is not a reporting error.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Energiekontor (EKT.DE)

Company has a positive net income?

Net income shows the profitability of a company. Positive net income means the company is profitable, which suggests good financial health and efficient management.

Energiekontor (EKT.DE) has reported a positive net income of €83,321,000 in 2023. This indicates that the company is profitable. Looking at the historical data of the past 20 years, it is noteworthy that while the company has experienced periods with negative net income, the trend generally has been upward in recent years. For instance, in 2021 and 2022, the net incomes were €36,205,000 and €44,536,000 respectively, showing a consistent improvement.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the amount of cash generated by a company's regular operating activities. It is an important indicator of a company's financial health.

For Energiekontor (EKT.DE), the Cash Flow from Operations (CFO) for the year 2023 amounted to 144,776,000 euros, which is positive. This earns the company 1 point in the Piotroski analysis. Over the last 20 years, the CFO has generally been positive with only a few years showing negative values. Notably, the company has demonstrated a strong upward trend in CFO since 2018, indicating that it has been increasingly effective in generating cash from its core operations. This positive trend is favourable as it suggests business stability and operational efficiency.

Return on Assets (ROA) are growing?

This criterion measures the changes in Return on Assets (ROA) over the past year. ROA is important because it indicates how effectively a company is utilizing its assets to generate earnings.

Energiekontor's ROA increased from 0.0745 in 2022 to 0.123 in 2023, thus adding 1 point to the Piotroski Score. This is a very positive trend, indicating a significant improvement in asset utilization. With an additional 4.85 percentage points, this increase shows higher profitability, which is paramount considering that the industry median ROA hovered around 0.37 to 0.4502 during the same period. To break it down further, over the last 20 years, Energiekontor's ROA has exhibited volatility. Since 2003, the company's operating cash flows have also been inconsistent, fluctuating between negative and positive values. Despite this historical instability, the latest increase signals a commendable turnaround. The industry median ROA has remained relatively stable, often surpassing 0.4; thus, Energiekontor's current ROA of 0.123, although improved, is still below the industry median. However, the trend indicates convergence towards industry norms, reflecting operational improvements that investors should find reassuring.

Operating Cashflow are higher than Netincome?

This criterion compares operating cash flow to net income to evaluate the quality of earnings. A higher operating cash flow than net income indicates strong cash earnings, adding value and stability.

For the financial year of 2023, Energiekontor's operating cash flow stands at €144,776,000, substantially higher than its net income of €83,321,000. This difference implies a healthy conversion of business activities into cash, which adds 1 point to Energiekontor in the Piotroski analysis. Historically, we've observed fluctuations from operating losses to increasing positive operating cash flow over the past two decades, reinforcing a generally positive trend.

Liquidity of Energiekontor (EKT.DE)

Leverage is declining?

Change in Leverage compares the company's debt-to-equity ratio from one year to the next. It is vital as it reflects the company's dependency on debt for its operations. A decreasing leverage is generally seen as a positive sign, indicating lower risk.

In 2022, Energiekontor's leverage was 0.4744, but it slightly decreased to 0.4609 in 2023. This reduction indicates a lessened dependency on debt to finance its operations. Though the decrease is minimal, it is still a positive trend. Historically, the firm's leverage has fluctuated significantly, peaking at 0.6952 in 2014 and hitting a low of 0 in several earlier years. For Piotroski’s criterion, the company earns 1 point.

Current Ratio is growing?

Current Ratio (CR) measures a company's ability to pay short-term obligations with its short-term assets. Higher CR indicates better liability coverage.

In 2023, Energiekontor's Current Ratio increased to 2.3135 from 1.8245 in 2022. This rise reflects an enhanced liquidity position, implying stronger short-term financial health. Compared to the industry median of 1.2996 in 2023, Energiekontor's CR is notably higher, showcasing above-average operational stability. Historically, the CR has fluctuated, peaking in 2014 at 3.5322 and bottoming in 2021 at 1.6576. The consistent rise since 2021 corroborates positive liquidity developments, earning it 1 point in Piotroski's analysis. Therefore, this trend is good.

Number of shares not diluted?

Change in outstanding shares refers to the number of shares that are currently held by shareholders, including blocks held by institutional investors and restricted shares owned by company officers and insiders. It is important as it shows if a company is issuing more shares, which can dilute the value for existing shareholders, or buying back shares, which can increase value per share.

The outstanding shares for Energiekontor (EKT.DE) show a noticeable anomaly from 2022 to 2023. In 2022, the company had 13,988,394 outstanding shares, but this number dropped to 0 by 2023. This significant decrease suggests either a major corporate restructuring, stock buyback program, or a reporting error. Over the last 20 years, there have been minor fluctuations in the number of outstanding shares, peaking at around 15,020,701 in 2007, and gradually decreasing. The consistent decrease generally suggests share buybacks, which is usually a positive signal for investors as it can indicate management's confidence in the company. However, the sudden drop to zero in 2023 requires further investigation to verify if it really implies a decrease or if it’s an error since 0 is not a practical value for a public company. Thus, per the Piotroski criteria, a score of 0 is noted as the shares did not materially decrease.

Operating of Energiekontor (EKT.DE)

Cross Margin is growing?

The change in Gross Margin measures a company's operational efficiency and financial health. A higher gross margin indicates a firm is generating more profit from its sales, which is crucial for sustainability.

In comparing the gross margin of Energiekontor (EKT.DE) from 2022 (0.6941) to 2023 (0.715), there is a slight increase. This uptick suggests that the company has enhanced its cost management or improved its pricing strategy, providing a more considerable gross profit on sales. The gross margin's improvement by 2.60 basis points signifies robustness in operational performance, adding confidence to potential investors. Historically, Energiekontor's gross margin has outpaced the industry median, reinforcing its competitive positioning. Improving from 0.6941 to 0.715 in the past year adds 1 point to its score, cementing a positive trend in operational efficiency.

Asset Turnover Ratio is growing?

Asset Turnover measures a company's efficiency in using its assets to generate revenue and is important for assessing operational effectiveness.

In 2023, Energiekontor's Asset Turnover is 0.3568, an increase from 0.3138 in 2022. This indicates improved efficiency in asset utilization, earning a score of 1. Historical trends show fluctuations, though recent improvements align with broader asset management strategies.