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Last update on 2024-06-06

MSCI (MSCI) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

MSCI (MSCI) earns an impressive Piotroski F-Score of 8/9 for 2023, showcasing robust financial health with strong profitability, liquidity, and efficiency metrics.

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: 8

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

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

The Piotroski F-Score for MSCI is 8 out of 9, reflecting a strong financial position based on profitability, liquidity, and operating efficiency. The company shows positive net income, strong cash flow from operations, increasing return on assets (ROA), higher operating cash flow than net income, decreasing leverage, no dilution of shares, higher gross margins, and improved asset turnover ratio. However, MSCI's ROA is still below the industry median.

Insights for Value Investors Seeking Stable Income

Based on the Piotroski F-Score of 8, MSCI appears to be a strong and potentially undervalued investment. It's worth considering for investment, especially if you're looking for companies with robust financial health and operational efficiency. However, keep an eye on its ROA relative to industry standards, as there's potential for improvement in competitive positioning.

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

Profitability of MSCI (MSCI)

Company has a positive net income?

Net income represents the company's total profit or loss after all expenses and taxes have been deducted from total revenue. Positive net income indicates profitability, a primary indicator of financial health.

Historical Net Income of MSCI (MSCI)

MSCI's net income for 2023 stands at $1,148,592,000. This is a positive figure, which adds 1 point to the Piotroski score. Over the past 20 years, MSCI's net income has consistently shown an upward trajectory, growing from $11,397,000 in 2003 to the current value in 2023. This trend demonstrates consistent profitability and robust financial health, indicating effective management and a strong business model. Hence, the trend is good.

Company has a positive cash flow?

Cash Flow from Operations (CFO) indicates the amount of cash generated by a company's regular business operations.

Historical Operating Cash Flow of MSCI (MSCI)

For the year 2023, MSCI registered a CFO of $1,236,029,000, which is positive and hence adds 1 point to the Piotroski Score. Given the upward trend over the past 20 years, from 2004 (zero) to 2023, it reflects strong and growing operational efficiency, indicating robust core business activities. This positive cash flow is crucial as it shows MSCI's ability to generate sufficient cash from its operations, positioning it for sustainable growth and giving it the capacity to handle debts and fund dividends or reinvestment. This steady climb in CFO is a favorable signal for investors.

Return on Assets (ROA) are growing?

The Piotroski analysis evaluates the change in Return on Assets (ROA) to determine a company's improving profitability. An increase in ROA indicates a firm's growing efficiency in generating profits relative to its assets.

Historical change in Return on Assets (ROA) of MSCI (MSCI)

The Return on Assets (ROA) for MSCI increased from 0.1658 in 2022 to 0.2185 in 2023. This marks a significant improvement, granting MSCI 1 point for this criterion. When placed in a historical context of the last 20 years, the uptrend in ROA is relatively consistent with the company’s operational cash flow trajectory, demonstrating sustained operational efficiency. However, when examining industry median ROA from 2003 to 2023, it can be observed that MSCI’s ROA still lags behind industry averages. In 2023, the industry median ROA was 0.6043, whereas MSCI’s ROA of 0.2185 is notably below this benchmark. This trend is good regarding Piotroski’s criteria as MSCI shows internal growth in efficiency, but it also highlights the necessity for MSCI to enhance its competitive positioning within the industry.

Operating Cashflow are higher than Netincome?

Criterion used to check if Operating Cash Flow is higher than Net Income.

Historical accruals of MSCI (MSCI)

In 2023, MSCI (MSCI) showed an Operating Cash Flow of $1,236,029,000 compared to a Net Income of $1,148,592,000. The Operating Cash Flow exceeded Net Income, which is a favorable sign. Generally, a higher operating cash flow than net income indicates that the company is adept at converting its revenue into actual cash flow. This bodes well for liquidity, ensuring the company has a sufficient cash buffer. Over the last 20 years, according to the data, MSCI's Operating Cash Flow has seen a consistent upward trend, from negative or zero values in the early years to exceeding a billion dollars recently. For 2023, this trends adds 1 to the Piotroski score, positively marking MSCI’s financial health.

Liquidity of MSCI (MSCI)

Leverage is declining?

Leverage considers the ratio of a company's total debt to its total equity. Changes in leverage can indicate how aggressively a company is financing its growth through debt.

Historical leverage of MSCI (MSCI)

The leverage of MSCI was 0.9274 in 2022 and decreased to 0.8367 in 2023. This reduction in leverage suggests the company is relying less on debt to finance its operations—an encouraging sign for the overall risk profile. Given the trend, the Piotroski scoring criteria would indeed add 1 point.

Current Ratio is growing?

Explain the criterion for MSCI (MSCI) and why it is important to consider

Historical Current Ratio of MSCI (MSCI)

A company's current ratio, calculated as Current Assets divided by Current Liabilities, is a liquidity metric used to gauge the firm's ability to meet short-term obligations. A current ratio above 1 indicates that the company has more current assets than current liabilities, which is generally interpreted as a sign of good short-term financial health. Conversely, a current ratio below 1 may signal potential liquidity problems. This metric is particularly crucial in cyclical industries or companies facing volatile market conditions.

Number of shares not diluted?

Change in Shares Outstanding measures whether a company's shares have increased or decreased over a specific period.

Historical outstanding shares of MSCI (MSCI)

Outstanding shares have decreased from 80,746,000 in 2022 to 79,462,000 in 2023, signaling a 1.59% reduction. Therefore, 1 point is added according to the Piotroski analysis. This trend is favorable as it often indicates stock buybacks, reflecting management's confidence in the company's future performance. Historically, the outstanding shares have fluctuated significantly over the last 20 years, ranging from a peak of 123,204,000 in 2012 to a low of 56,256,000 in 2004.

Operating of MSCI (MSCI)

Cross Margin is growing?

The criterion examines the Gross Margin to determine its increase or decrease over the years. A higher Gross Margin indicates better cost management and profitability, making it imperative to track such trends.

Historical gross margin of MSCI (MSCI)

The Gross Margin for MSCI has increased from 0.8202 in 2022 to 0.8234 in 2023, warranting the addition of 1 point. This positive trend, reflected in the 20-year dataset, shows the company's progressively efficient cost structure. For context, the industry's median Gross Margin was 0.6643 in 2022 and 0.6043 in 2023, indicating MSCI's superior performance compared to its industry peers.

Asset Turnover Ratio is growing?

Asset Turnover compares a company's sales to its assets, indicating how efficiently it is using its assets to generate revenue. A higher ratio implies better efficiency.

Historical asset turnover ratio of MSCI (MSCI)

In 2023, MSCI's Asset Turnover increased to 0.481 from 0.4281 in 2022. This uptick in Asset Turnover signifies improved efficiency, suggesting the company is generating more revenue per dollar of assets held. Over the last 20 years, the fluctuating trends show MSCI's varying efficiency in asset utilization. However, the recent increase aligns with a broader positive trend, representing a more efficient use of assets. Thus, this trend is favorable, earning a point in Piotroski Analysis.


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