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Last update on 2024-06-06

Invesco (IVZ) - Piotroski F-Score Analysis for Year 2023 (Final Score: 5/9)

Invesco (IVZ) Piotroski F-Score Analysis for 2023: Assessing profitability, liquidity & operating efficiency with a final score of 5/9.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 5

We're running Invesco (IVZ) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
0
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
0
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
0
Asset Turnover Ratio is growing?
1

The Piotroski F-Score is used to evaluate a company's financial strength, with a score ranging from 0-9 based on nine criteria related to profitability, liquidity, leverage, and operational efficiency. Invesco (IVZ) has a Piotroski score of 5 for 2023. While the company has positive cash flow from operations and its current ratio indicates good liquidity, concerns arise from its negative net income, declining ROA, and increasing leverage. Other mixed results include a reduction in the number of outstanding shares and a slight improvement in asset turnover.

Insights for Value Investors Seeking Stable Income

Invesco (IVZ) has a moderate Piotroski score of 5, indicating a mixed financial position. Key strengths include positive cash flow from operations and good liquidity. However, the negative net income and increasing leverage pose significant risks. Given these factors, potential investors should be cautious and conduct further research into recent performance issues before making an investment decision.

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

Profitability of Invesco (IVZ)

Company has a positive net income?

Analyze the net income criteria for Invesco (IVZ) by checking if it is positive or negative, scoring it accordingly.

Historical Net Income of Invesco (IVZ)

Invesco's net income for 2023 is -$96.9 million, which is negative. This results in a score of 0 for this criterion. Over the last 20 years, Invesco has generally reported positive net income, with years such as 2021 seeing a figure as high as $1.62 billion. The negative net income for 2023 is a noticeable deviation from its historical trend, raising concerns about the company's recent performance and future outlook.

Company has a positive cash flow?

Cash Flow from Operations (CFO) measures the amount of cash generated by a company's normal business operations. Positive CFO indicates more cash inflow than outflow, crucial for sustainability.

Historical Operating Cash Flow of Invesco (IVZ)

For Invesco (IVZ), the CFO in 2023 stands at $1,300,800,000, affirming a positive trend. Given the 20-year historical CFO of the company, oscillating yet largely positive, the current CFO reflects robust financial health, earning 1 Piotroski point. This trend fosters confidence in efficient cash generation from ongoing operations.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) is used to measure the efficiency of a company's management in generating earnings from its assets from one year to the next. Comparing ROA over two consecutive years offers insights into the company's operational efficiency.

Historical change in Return on Assets (ROA) of Invesco (IVZ)

For Invesco (IVZ), the ROA has declined from 0.0295 in 2022 to -0.0033 in 2023. Therefore, for the Piotroski F-score criterion, we deduct 1 point as the ROA has not increased. Looking at the historical trends, Invesco experienced fluctuations in their ROA over the past two decades. The drop in 2023 could be attributed to larger economic or sector-specific challenges as we observe similar trends where the industry median ROA also shows instability in recent years, though not to the same negative extent. The industry median ROA has hovered above 0.4, demonstrating relatively better asset utilization on an industry scale. Invesco's ROA for 2023 is below the majority of its historical figures and thus reflects poorly relative to typical performance metrics.

Operating Cashflow are higher than Netincome?

This criterion assesses whether a company's operating cash flow exceeds its net income. It is crucial because a higher operating cash flow compared to net income suggests that the company's earnings are supported by cash flow rather than accounting adjustments.

Historical accruals of Invesco (IVZ)

Invesco's operating cash flow for 2023 stands at $1,300,800,000, markedly higher than its net income of -$96,900,000, signifying a positive disparity of approximately $1.4 billion. This favorable trend highlights that Invesco's cash flow from actual operations is robust relative to its net income impacted by non-cash items. This criterion scores 1 point as the operating cash flow exceeds the net income, reflecting prudent financial management and strong liquidity.

Liquidity of Invesco (IVZ)

Leverage is declining?

Change in Leverage compares the relative proportion of a company's debt to its equity. It's a critical measure of the financial risk of the company as higher leverage implies potentially higher risk but also higher return.

Historical leverage of Invesco (IVZ)

Comparing the leverage ratio of Invesco (IVZ) from 2022 (0.2876) to 2023 (0.3126), we observe an increase. Over the last 20 years, leverage fluctuated notably, from a low of 0.0553 in 2011 to the recent high of 0.3126 in 2023. This upward trend signifies a higher proportion of debt relative to equity in 2023 compared to 2022, implying increased financial risk. Therefore, for the Piotroski score, this criterion would receive 0 points.

Current Ratio is growing?

The change in current ratio measures a company's ability to cover its short-term obligations with short-term assets. An increasing current ratio can indicate improved liquidity.

Historical Current Ratio of Invesco (IVZ)

For Invesco (IVZ), the Current Ratio has increased from 1.6228 in 2022 to 2.2981 in 2023. This increase indicates improved liquidity and a stronger ability to cover short-term obligations, which is a positive trend. Over the past 20 years, Invesco's current ratio has fluctuated; notable lows and highs were observed in 2020 (0.3283) and 2023 (2.2981), respectively. Compared to the industry median of 2.1006 in 2023, Invesco’s current ratio is higher, further indicating better liquidity management relative to industry peers. As a result, Invesco earns 1 point for this criterion.

Number of shares not diluted?

Outstanding shares represent the total shares of a company that are held by shareholders, including insiders and institutional investors. A decrease in outstanding shares typically signals share buybacks, which can be an indicator of management's confidence in the company's future prospects.

Historical outstanding shares of Invesco (IVZ)

The outstanding shares of Invesco (IVZ) decreased slightly from 457,500,000 in 2022 to 454,800,000 in 2023. This reduction of approximately 0.59% indicates that Invesco has conducted a share buyback initiative. Given the Piotroski Analyses, this criterion would score 1 point as the company has decreased its number of outstanding shares, which is generally seen as a positive indicator. Evaluating the historical data over the last 20 years, Invesco's strategy has varied, but the recent trend supports the positive assessment. Invesco's peak outstanding shares occurred in 2003 at more than 860 million shares, reducing significantly over time, suggesting a long-term strategic focus on returning capital to shareholders through buybacks.

Operating of Invesco (IVZ)

Cross Margin is growing?

Change in Gross Margin for Invesco (IVZ) between 2023 and 2022

Historical gross margin of Invesco (IVZ)

The Gross Margin for Invesco (IVZ) in 2023 stands at 0.3508, a decrease from 0.403 in 2022. This signifies a decrease in gross profitability. Therefore, 0 points are to be awarded for this criterion. Looking at additional data over the last 20 years, it's evident that Invesco's gross margin has experienced fluctuations. Notably, industry trends reveal that the industry's median gross margin has generally been higher than Invesco's gross margin during this period except for few anomalies in past. This could be a competitiveness indicator reflecting on management efficiency and pricing strategy issues within the company.

Asset Turnover Ratio is growing?

Asset Turnover measures the efficiency of a company's use of its assets in generating sales revenue. It is calculated as Sales Revenue divided by Total Assets.

Historical asset turnover ratio of Invesco (IVZ)

The Asset Turnover ratio for Invesco (IVZ) increased slightly from 0.1937 in 2022 to 0.1948 in 2023, indicating a marginal improvement in utilizing its assets to generate revenue. This small increase is positive, suggesting that for every dollar of assets, Invesco generated slightly more revenue in 2023 compared to 2022. Historically, this rate has experienced various fluctuations, much higher in years like 2007 (0.3492) and significantly lower in recent years. This improvement, although minor, can be seen as a positive trend in light of the company’s recent performance. Thus, 1 point is added to the Piotroski F-Score.


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