Forecaster Icon

Go to Terminal

Beat the market with Piotroski F Score

Presented by Luca Discacciati, co-funder of Forecaster Terminal, the video teaches how to use the Piotroski F-Score for stock selection. This financial metric, devised by Professor Joseph Piotroski, evaluates a company's financial strength, aiming to identify stocks that could outperform the market.
The video is particularly suited for individual investors, financial analysts, value investors, and academics seeking practical tools for investment analysis.
It explains the calculation and application of the Piotroski F-Score, showcasing its potential to beat the S&P 500 over various periods.

  • Piotroski F-Score Explained: Understand how the Piotroski F-Score, a financial health metric, can beat the S&P 500 by analyzing company balance sheets.
  • Investment Strategy Insights: Learn strategies for selecting stocks in the US, Europe, UK, and Japan markets using the Piotroski Score to identify high-performing investments.
  • Financial Analysis Tool: Discover the ease of calculating the Piotroski Score to assess company strength, from profitability to operational efficiency.
  • Value Investing Techniques: Explore how the Piotroski F-Score aids value investors in finding undervalued stocks with strong financial fundamentals.
  • Beat the Market with Data: Gain insights on achieving above-market returns by applying the Piotroski F-Score for effective stock selection and portfolio management.

Harnessing the Power of Piotroski F Score: A Blueprint for Outperforming the S&P 500

In the intricate world of financial markets, the quest for a reliable measure that offers a clear insight into a company's health led to the creation of the Piotroski F Score by Stanford professor Joseph Piotroski. This seemingly simple yet profoundly effective parameter has demonstrated its ability to outpace the S&P 500 across multiple time frames, including the last 5, 10, and 20 years. By delving into a company's balance sheet, the Piotroski F Score distills complex financial data into a single digit, providing a snapshot of the company's fiscal robustness and signaling its potential for future performance.

Unpacking the Piotroski F Score
The elegance of the Piotroski F Score lies in its straightforward calculation process, which evaluates a company's condition based on nine criteria categorized into profitability, leverage/liquidity, and operating efficiency. Scores range from 0 to 9, with higher scores indicating stronger financial health. A score of 9 suggests a company is solid and reliable, whereas a score of 0 raises red flags about its financial stability. This scoring system empowers investors to sift through the financial noise and pinpoint stocks with the strongest prospects.

A Strategy That Stands the Test of Time
A compelling backtest of the Piotroski F Score reveals its capacity to significantly outperform the S&P 500 by focusing on companies that rank high according to this criterion. This strategy's success is underscored by a comprehensive study encompassing stock markets across the US, Europe, UK, and Japan, affirming the score's universal applicability and effectiveness. Companies scoring a nine consistently showed superior performance, validating the Piotroski F Score as a potent tool for identifying outperformers in various market environments.

Practical Applications and Insights
Delving into practical applications, the Forecaster Terminal emerges as an invaluable resource for investors aiming to leverage the Piotroski F Score. For example, tech giant Apple, with a high score, exemplifies how even well-known companies can be analyzed through this lens, offering reassurance about their financial health. On the other end of the spectrum, companies like Pfizer, with a solid but not perfect score, highlight the score's role in uncovering value in stocks that may be undervalued by the market, presenting lucrative opportunities for discerning investors.

The Path Forward: Navigating 2024 with Piotroski F Score
As we look towards 2024, the Piotroski F Score stands as a beacon for investors navigating the complex terrain of the stock market. Whether it's evaluating stalwarts like LVMH, uncovering hidden gems like Pfizer post-dip, or reassessing the valuation of stocks like PayPal, this parameter serves as a critical component of a comprehensive investment strategy.
The Forecaster Terminal, with its rich feature set including the Piotroski F Score, and Beneish M score, offers a platform for investors to explore and exploit these opportunities, backed by robust analysis and insights.
In conclusion, the Piotroski F Score is more than just a number—it's a fundamental analysis powerhouse that equips investors with the knowledge to make informed decisions, outperform the market, and build a portfolio poised for success in 2024 and beyond.
As the financial landscape continues to evolve, tools like the Forecaster Terminal and metrics like the Piotroski F Score will remain indispensable allies for those committed to achieving superior returns.

HERE you can find the original 2002 paper from Joseph D. Piotroski;

You can find Piotroski score for every listed company in the Forecaster Terminal.

This article was published on

Last edited on