Last update on 2024-06-07

SAF Holland (SFQ.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 9/9)

Discover the comprehensive Piotroski F-Score analysis for SAF Holland (SFQ.DE) for 2023, scoring a perfect 9/9. Assess profitability, liquidity, and efficiency.

Short Analysis - Piotroski Score: 9

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

The Piotroski F-Score is a system to assess a company's financial strength, scoring between 0 to 9, based on 9 criteria involving profitability, liquidity, and leverage. We're examining SAF Holland (SFQ.DE), which got the highest score of 9, indicating a strong financial position. Key points include: - Profitability: Positive net income (€79.9M) and cash flow from operations (€202.7M). ROA is improving but lower than industry median. OCF is much higher than net income, indicating quality earnings. - Liquidity: Current Ratio grew from 1.8479 to 2.2573, indicating strong liquidity. Leverage showed a slight decrease which is good, but no points added here cause of fluctuations over the years. - Operating Efficiency & Structure: Increasing Gross Margin and Asset Turnover Ratios suggest better efficiency and asset management. There were no changes in shares outstanding recently, but historically varied significantly.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski analysis, SAF Holland (SFQ.DE) appears to be financially strong and a potentially valuable investment. The company earns a top score of 9, reflecting its positive performance in profitability, liquidity, and operational efficiency. The consistent net income and robust cash flow are particularly encouraging. However, its leverage and return on assets could be areas for ongoing scrutiny. Overall, SAF Holland seems like a worthwhile stock to consider for further analysis and long-term investment.

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

Profitability of SAF Holland (SFQ.DE)

Company has a positive net income?

Determining whether the net income is positive or negative helps to understand the financial health of SAF Holland.

For the fiscal year 2023, SAF Holland recorded a net income of €79,933,000, which is notably positive. Over the last 20 years, the trend of net income reveals fluctuations, but recent improvements stand out. From losses as deep as €48,913,000 in 2009 to a consistent rise in the last few years, culminating with this strong performance in 2023, it showcases a positive growth trajectory. With net income being positive, SAF Holland earns 1 point on this Piotroski criterion.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the cash inflows and outflows from core operations.

For the fiscal year 2023, SAF Holland (SFQ.DE) reported a CFO of €202,726,000, indicating a substantially positive cash flow from its core operations. This positive figure warrants adding 1 point according to the Piotroski Analysis. A positive CFO is essential as it indicates that a company's core business is generating sufficient cash to maintain and grow its operations. Over the last 20 years,SFQ.DE has shown a progressive increase, with recent years demonstrating significant growth - €137,922,000 in 2020, €153,392,000 in 2022, and €202,726,000 in 2023. This steady increase in operating cash flow signals strong operational efficiency and financial health and is an encouraging indicator for potential investors.

Return on Assets (ROA) are growing?

Return on Assets (ROA) is a measure of how efficiently a company utilizes its assets to generate profit. A higher ROA indicates better performance.

SAF Holland's ROA increased from 0.0486 in 2022 to 0.0507 in 2023. This is a positive sign as the company is generating more profit per dollar of assets, adding 1 point to the score. However, the industry median ROA has consistently been higher, with the latest figure at 0.196, suggesting room for improvement. Despite the increase, SFQ.DE's ROA still significantly lags behind its industry peers, indicating potential areas for optimization and enhanced asset utilization strategies in the future.

Operating Cashflow are higher than Netincome?

The criterion compares Operating Cash Flow (OCF) to Net Income to assess the quality of earnings. A higher OCF than Net Income indicates strong earnings quality and better cash generation.

In 2023, SAF Holland's Operating Cash Flow (OCF) stands at €202.73 million, significantly higher than its Net Income of €79.93 million. This yields a ratio of approximately 2.53 (202.73/79.93), suggesting that the company generates substantial cash from its operations relative to its net earnings. This disparity can indicate healthy earnings quality, as the company is not solely reliant on accounting profits but also capable of converting revenue into real cash flow, adding a layer of financial robustness. A historical glance shows a general upward trend in both OCF and Net Income, reinforcing the positive outlook. Consequently, based on this criterion, SAF Holland justifiably earns 1 point.

Liquidity of SAF Holland (SFQ.DE)

Leverage is declining?

Leverage measures the company's use of borrowed funds to finance its operations. It is essential as too much debt can be risky.

The leverage for SAF Holland has increased from 0.4054 in 2023 to 0.4303 in 2022, therefore, no point is added. Historically, the Leverage has shown fluctuations with significant peaks in 2015 (0.4269), 2016 (0.4293), 2020 (0.3892), and a ramp-up to 0.4303 in 2022, finally slightly decreasing to 0.4054 in 2023. Increasing leverage can pose risks if not managed correctly, potentially making the company more vulnerable to financial distress. Depending on how the borrowed funds were used, this increase could signal potential trouble or growth opportunities.

Current Ratio is growing?

Current Ratio measures a company's ability to pay short-term liabilities with short-term assets. A higher ratio is generally favorable as it indicates a strong liquidity position.

SAF Holland's Current Ratio increased from 1.8479 in 2022 to 2.2573 in 2023, which adds 1 point to the Piotroski Score. This trend is favorable as it indicates improved liquidity and a better ability to meet short-term obligations. This ratio is also considerably higher than the industry median of 1.7153 in 2023, further underscoring SAF Holland’s strong liquidity position.

Number of shares not diluted?

Changes in shares outstanding reflect capital structure decisions, impacting shareholder value and market perception of the company's stability.

For the years 2022 and 2023, SAF Holland's outstanding shares remained constant at 45,394,000. Given that the shares did not decrease, no additional point is awarded. Historically, the shares have varied significantly over the last 20 years, ranging from 34,877,800 in 2006 to a peak of 53,638,000 in 2016. This constancy in recent years may suggest a stabilization in the company's equity structure, which could be perceived positively in terms of capital management and investor confidence. However, from a Piotroski perspective, the lack of a decrease prohibits an additional point in this criterion.

Operating of SAF Holland (SFQ.DE)

Cross Margin is growing?

The Gross Margin criterion examines whether the company's gross margin has improved or deteriorated over the specified timeframe.

SAF Holland's (SFQ.DE) Gross Margin has increased from 0.1658 in 2022 to 0.196 in 2023. This indicates an enhancement in efficiency or pricing strategy as the company retained more of its revenue as gross profit. A Gross Margin improvement is good as it suggests the company is more profitable at the gross profit level than previously.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets in generating sales revenue. It's crucial because a higher ratio indicates better performance.

The Asset Turnover ratio for SAF Holland has increased from 1.2457 in 2022 to 1.3372 in 2023. This positive trend, marking an upward movement, earns the company a point in the Piotroski analysis. Historically, this level is comparable to past years with high efficiency, suggesting effective asset management. The increase not only reflects an improvement but also places it closer to the highs seen in years like 2011 when the asset turnover was at a peak of 1.6282. This upward trajectory is favorable and indicates enhanced performance.