How to Use Piotroski Score to Find Fundamentally Strong Long-Term Stocks | Joseph Piotroski F-Score

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The Piotroski Score is a simple yet effective way to gauge the financial health of any company. This tool was developed in the year 2000 by Joseph Piotroski and its a simple scoring system that uses 9 different variables and offers a composite score to the investor. In this video, I have discussed all 9 variables that form part of Piotroski F-Score and what do these metrics aim to accomplish. I have separately looked at if the system is relevant in the Indian context and how some small modifications in the Piotroski score can improve the portfolio's risk-adjusted return
👉 Screener link: www.screener.i...
👉 Video Chapters:
00:00 Piotroski's F-Score
01:38 What is Piotroski Score?
02:37 1. Net Income
03:31 2. Return on Assets
04:19 3. Cash flow from Operations
04:58 4. Earnings Quality
06:04 5. Leverage
06:39 6. Current Ratio
07:26 7. Issuance of New Shares
08:19 8. Gross Profit Margin
08:42 9. Asset Turnover Ratio
10:42 Performance of Piotroski Score
12:00 Modified Piotroski Score
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Disclaimer: I am not a SEBI registered investment advisor or research analyst. I am not registered with PFRDA or IRDA either. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented. Some of the links I have posted in the video, the description, the comments and other related resources might be affiliate links

[@pritish369]

This video is Gold. I'd rather binge your videos on investing than a web series on OTT. Thank You Sir.

[@shankarnath]

Most welcome. Glad you found it informative and helpful

[@SasiGudla]

As usual, you teach complex stuff in such a breezy manner that I keep wondering how much your subscribers (like me) life would have been impacted on the positive side if only we had access to your quality content a decade back. Having said that, it is never too late to invest in learning to invest. And you are one of the best teachers out there for people like me.

[@shankarnath]

Wow, thanks! Happy to be playing a small part in your financial journey

[@priyaharne893]

No words... How u explain its mind blowing😊

[@shankarnath]

Thank you so much!

[@sandipghiya3493]

Although many would be knowledgeable on this score, you deliberated more details brought good clarity. Your data driven approach always melt hearts.

[@shankarnath]

Thank you! Glad you found it useful & informative

[@manishp7206]

I searched Piotroski Score and your video came up, along with others'. But I clicked yours as I knew it would be most reliable. And it is. Many thanks.

[@shankarnath]

Glad I could help!

[@pkprprempavankumar8749]

Knowledge + creativity is simply superb ji. Every video clearly says the time you invest in brininging us the quality content.

[@shankarnath]

So nice of you. Thanks a lot 🙌

[@nitinshah8168]

Dear Sir your contents are truly inspiring. I’m an aspiring value investor . Please make content for building an excel portfolio tracker with statistics and periodic review and data based analysis and decision making . Such excel module to have online data downloaded facility and linked formulas. There are several such available in excel and google sheets however with your experience u can refine and improve it lot better 2- once invested for a long term please advise what should be the periodicity at which the parameters to be reviewed and also what parameters to be tracked and what is source of information 3- There are periodic news affecting invested cos than how to track such news to that company for the price and value movement your valuable content on above topics shall immensely help investor fraternity Regards Nitin Shah

[@shankarnath]

Thank you for your suggestions

[@abhi13sharma123]

I saw yr first video, appraised that cuz I liked, you responded with a Playlist... I'm covering that list. With each day I find one after another amazing video. 👏 👏 👏 Super like.

[@shankarnath]

Awesome! Thank you!

[@thatguywithm]

Proud to click on the notification of this video as soon as it arrived.

[@shankarnath]

Thank you for your continued patronage 🙌

[@joethim]

Have been waiting for this topic after using it in Screener. Thank you as always 👏

[@shankarnath]

Most welcome

[@benm2238]

Shankar Nath is best, as always!!

[@shankarnath]

Glad you like my work. Thanks!

[@hitstraight]

Thanks to your team for taking out time and enriching viewers like me with extraordinary content as usual, loved it. Looking forward to learn more from you in future.

[@shankarnath]

Much appreciated! Thank you very much

[@ajayghodake9914]

Another Masterpiece from Mr. Nath. Great Going Sir.😊

[@shankarnath]

Thank you so much 😀

[@rameshpujala]

Thank you so much to your team for sharing Good knowledge. Please keep posting more content.

[@shankarnath]

Most welcome

[@tradingmyway0024]

What a lovely and insightful video. Your videos are full of knowledge and full of learning. ALWAYS OUT OF WORDS TO TRULY APPRECIATE YOUR EFFORTS. SO PLEASE JUST ACCEPT MY REGARDS FOR YOU, Shankar ji! 👍🙏💐

[@shankarnath]

So nice of you. Thank you very much for this kind appreciation and warm words. I am glad to be playing a small part in your financial journey

[@sucharya7717]

Amazing video, kudos to you for creating this in such lucid manner where even a layman can grasp ! ❤

[@shankarnath]

Thank you so much!

[@karthikeyanv463]

Thanks Shankar... Another gem of a presentation... ❤

[@shankarnath]

My pleasure 😊 Glad you liked it

[@satishkp]

As always, kudos for the content and research.

[@shankarnath]

Thank you very much. Glad you liked it

[@samirdas8358]

Very good content. Thanks for adding value to the community. I wish and pray for your good wealth.

[@shankarnath]

Much appreciated! Thank you very much for your good wishes

[@alappuzha9]

U r simply the best .. my Dronacharya for learning markets

[@shankarnath]

Glad to hear that. Happy to know you're finding my work helpful

[@user-kw6dx9pf9f]

hi, thank you for the detailed and the way u've explained, looking forward more videos like you tear the formula's of all

[@shankarnath]

Most welcome

[@nabeelyahiya]

Thank you for such an informative video❤

[@shankarnath]

You are so welcome!

[@jagrutdedhia6795]

Very Nicely explained in detail, Thanks!

[@shankarnath]

You are welcome! 🤗

[@parthaaec07]

Wonderful topic greatly presented

[@shankarnath]

Glad you liked it

[@praveengogia555]

Great learning video, as always. Thank you!

[@shankarnath]

Glad you enjoyed it!

[@Nadodimalayali]

Excellent elegant teacher

[@shankarnath]

Thank you!

[@yerriswamy7649]

thank you so much sir

[@shankarnath]

Most welcome! 🙌

[@Ravi-Krishna]

Thank you for this video. I have been waiting for your next video and here it comes, thanks a lot!

[@shankarnath]

My pleasure! Hope you found it informative

[@mithunmahato309]

This is the content my brain was craving for ❤❤❤❤

[@shankarnath]

Glad you found it useful and informative 🙌

[@muhammedrashid7514]

High quality content…it justifies the time we spend to watch your videos…do we have same for us stocks

[@shankarnath]

Thank you very much.

[@paragvaishampayan9501]

Appreciable efforts ❤

[@shankarnath]

Thanks a lot 😊

[@bhimaraju3652]

Very much informative video❤

[@shankarnath]

Glad you liked it 🙌

[@satheshkumar5870]

Useful information video 📸

[@shankarnath]

Glad you think so!

[@rammurthyp6]

Your explanation is very good sir

[@shankarnath]

Thank you very much

[@neelamvalecha4837]

Very good presentation .!!!

[@shankarnath]

Thanks a lot. Glad you liked it!

[@ankitkishore77]

Big thumps up... I believe we need to factor in Sales Growth (% YoY) in last 3 years as a good metrics to see if the %change in PE (YoY) in last 3 years do justify the valuations. That would be 2nd layer to find fundamentally great companies using P F_score and my take on judging the valuations.. Of course the market cap assessment would be of great help too.

[@shankarnath]

Thanks for sharing your views

[@avgang99]

Great video Sir ! Please throw some light on how to predict the future earnings and future cashflows of a company in your next video !

[@shankarnath]

Thanks for the suggestion

[@user-lr7du9cy4m]

Great video!

[@shankarnath]

Thanks!

[@pappalabalayogi9495]

Thanks

[@shankarnath]

Thank you very much for your kind appreciation 🙌

[@amitjain11000]

good one, I studied this in my CFA.

[@shankarnath]

Good to know

[@PaulMaddela]

Brilliant video as usual Shankar.😊 i am curious to know how you calculate the returns on historical data. Must be a pain to collect this data.

[@shankarnath]

Thank you very much. Yes, you're right .. forward testing is difficult. I've done it in some 3-4 videos previously and it requires compiling the information from screener manually.

[@VivekSir90]

Great video

[@shankarnath]

Thanks!

[@arunkiwi]

Thanks for the really informative video. In Modified Piotroski screener, there are only 9 companies with Market cap > 5000 Cr. Is it okay to consider investment in smaller companies based on Piotroski score along with technical indicators?

[@shankarnath]

Most welcome. I haven't come across any restrictions based on market cap so one has two options: a) go below 5000 crores until a mcap one is comfortable with or b) relax on the F-score and consider a score of 8 along with 9

[@jayaprakash456abc]

thank you Sir.... good info

[@shankarnath]

My pleasure!

[@user-bu1gj8mp1s]

Super Duper Toper 🤩content and research

[@shankarnath]

Glad you liked it! 🙌

[@rajeevkumria]

Hi Shankar. I have always had kind of mixed views about this score. While it is a great idea it suffers from flaws as Metrics like RoA are very industry specific. Further minor annual fluctuations do not rob a company of its strong fundamentals scores. Leverage is also temporal and fluctuates. Timing of entry becomes less important for long term value investment and the current minor fluctuations in markers can confuse the matter.

[@shankarnath]

Hi Rajeev - you're right. In my view, the F-Score is a bit like the student who has improved his score from 70% to 80%. However, relatively he/she still ends up getting a C+ grade as his fellow peers improved even more On the positive side, the Piotroski score helps identify improving companies. On the negative side, it excludes sector performance and market valuation.

[@mohanvikaslakshmipathy5789]

Sir, the video is very insightful. Hats off for your efforts and dedication. Can you please share some light on paper industry as this is linked to lot of changes like single use plastic ban, logistics and e-commerce boom.

[@shankarnath]

Thanks for the suggestion

[@anujtiwari3621]

Very good 🙏🌹

[@shankarnath]

Thank you!

[@CenturyTrade]

Coal India score 7 in my software

[@pranavmandlik]

Sir, Please make a video on DuPont analysis Thank you!

[@shankarnath]

Thanks for the suggestion

[@1minuteeasy46]

Sir deserve more subscriber

[@shankarnath]

Thank you!

[@anandtiwari6372]

I started to invest in MF through SIP monthly of Rs 20000 for 20 years, need to know, is it right as per MF market trend for heavy return and.. Plz reply and guide..

[@a_rod1678]

Summary: To use this metric in screnner, you can first screen your stocks using your normal query. Then using Piotroski score, you can further filter the stocks

[@koushikbanerjee4836]

Interesting topic, please consider making videos on Buffet or Peter lynch screener

[@shankarnath]

Thanks for the suggestion. There is already a video on Peter Lynch's screener on the channel: kzbin.info/www/bejne/gGrVk4R6eNRgopo

[@fallen8689]

its engaging af

[@manish_mudgal]

Waiting for ur video❤

[@shankarnath]

Hope you enjoyed it!

[@AbhiN-nt6px]

@shankarnath Hi Shankar , very informative video. Quick question - when the first parameter of Piotroski is +net profit, how come there are companies with -NP among the result of the screener query you had shared. (Eg Gayatri Sugars)

[@shankarnath]

Thank you. I'm not sure , maybe there is some minor bug in the screener platform. Specific to Gayatri Sugars - they made a profit of 34 crores in FY23.

[@sourabhmayekar3354]

Awesome

[@shankarnath]

Thanks

[@harshitthirani9872]

Sir I wanted to know about the screeners you used to compile the current years losers portfolio

[@shankarnath]

Please refer to video on Contrarian Investing for an understanding of that. Kindly watch: kzbin.info/www/bejne/e6XYe5RjidOGmZY

[@karthekeyansubramanian.v3489]

❤

[@vijayp6459]

Sir please make a video from the book The Little Book That Makes You Rich: A Proven Market-Beating Formula for Growth Investing by Louis navellier. Thanks

[@shankarnath]

Thanks for the suggestion

[@antsonm]

Hi request if you can make a video on MF vs RE investments keeping inflation & compunding in mind. Backed by data. Couldn't find a good one in the net yet.

[@antsonm]

I was finding it really difficult to explain to my dad, why MF is better keeping liquidity in mind.😢

[@shankarnath]

Thanks for the suggestion

[@nabeelnm7183]

6 score can be considered good?

[@shankarnath]

Most research I came across say 7, 8 and 9

[@fintaxshorts]

Hi, can you please tell us why you haven't considered factors like the Current Ratio, Issuance of New Shares, Gross Margin, and the Asset Turnover Ratio in the 'Modified Piotroski' screener link shared by you?

[@shankarnath]

Because that's all I could manage (I recall even saying that in the video). I couldn't find data points like new shares issues or gross margin on screener. If you have a better query on this, please do post it here. Keen to learn!

[@opt-sg7em]

Hi sir, it was a great video and learning. But when I checked the screener you shared, it doesn't mention about the Piotroski Score. Am I missing something

[@shankarnath]

Please click on EDIT COLUMNS button and add Piotroski Score.

[@biotutun]

❤👍🏽

[@victor-ev6np]

why are there so low number of likes?

[@EduTecCBSE]

Sir Namaskar Thoda Hindi Mai bi samga digiye

[@mozo199]

@7:44 shouldnt it be greater and not

[@shankarnath]

Yes, you are right

[@mozo199]

@@shankarnath cool. I love your work and finance is fun with you. I would love to get your personal insights on how you pick your stocks and a little more videos on how to assess the qualitative side of companies. Thank you Shankar

[@shankarnath]

Most welcome. 1. My own approach to stock picking is about picking the best parts of the different strategies I am presenting on my channel. But it's not static .. for different sectors, a different set of metrics is at play and I try to cover that in my sector videos too. 2. On the qualitative side, a lot of it comes from reading annual reports, news article and very important, the quarterly earnings call transcript.

[@mozo199]

@@shankarnath hmmm yes i like the Shankar's viewpoint at the last of each videos and would love it if were closed ended, the idea is if Shankar 10 lakh as capital how would he invest it l, this will cover stock picking criterias and capital allocation.

[@shankarnath]

@@mozo199 Thanks for the suggestion

[@norvinmenezes1545]

Probably need to remove companies having pledged shares too. How come companies with negative sales growth are turning up in the list?

[@DVSAGAR-ue6xg]

Please make video in Hindi .

[@patilsuhas007]

This channel became politically supporting and using Bharat multiple times.

[@MARKCRASTO]

I liked the video alot. However, you should have elaborated on how the additional parameters of the Modidfied Priotriski score are used, and what was the annualized return using the modified parameters. Nevertheless, great video, keep em coming ❤

[@shankarnath]

I apologize for missing out on those two points

[@yaqooty2k]

youtube.com/@shankarnath Thanks for the video. In the screener query that you have shared, Debt to Gross block should be less than that of preceding year but has been enters as greater than. Am i missing something here?

[@shankarnath]

Yes, it should be less than. I've corrected it now

[@MuraliKatta-jc7ir]

Thanks

[@shankarnath]

Thank you very much Murali. I'm glad you liked this video; appreciate the gesture 🙌

[@SrinivasPaulraj]

❤