Piotroski F Score
In plain terms
Score each company on 9 boring-but-important accounting checks (positive profit, improving margin, no new shares issued, less debt, etc.). Stocks that pass 7-9 of them are quality compounders; stocks that pass 0-2 are distressed. Long the strong, short the weak.
How it works
Piotroski (2000, JAR) showed that a 9-signal accounting score distinguishes winners from losers within the high-B/M (value) universe. Long F>=7 / avoid F<=2 added ~7.5% annualized over 1976-1996 inside the value tertile, and ~23% in the highest B/M decile. Modern replications through 2021 confirm the score still differentiates forward returns even without the value gate; works especially well in uncertainty regimes when low-quality distressed names are marked down faster.
Live results
0 times picked on its own · 52 times inside a blend (46 beat the stock) · updated 2026-06-06Data dependencies
- Fundamentals quarterly
Quarterly fundamentals (income, balance, cash-flow) from FMP + SEC.
Expected edge
- Reported return
- ~7.5% ann. long-only in value tertile
- Tested over
- 1976-1996
~7.5% ann. long-only inside value tertile (1976-1996); 3-5% post-publication OOS
Example tickers where this is likely to fire
Illustrative only, the signal fires based on the live data, not a fixed list.
Related families
Earnings backed by cash flow are repeatable; earnings backed by accruals (paper changes in receivables/inventory) fade. Short high-accrual names.
Cash operating profit (backs out accrual fudges) over book equity is a sharper quality predictor than gross profit. Long the cash-rich.
Companies with high gross profit / total assets keep beating peers — it's the cleanest measure of 'is this business actually good'.
High-quality stocks (good margins, high ROE) that are ALSO trending up tend to beat low-quality losers. Goes long only when both check out.
Explore Piotroski F Score on alphactor.ai
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