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Piotroski F-Score is a composite metric that measures the financial strength of a company. Research shows that a high Piotroski F-Score of 8 or 9, coupled with cheap valuation, can return on average of 7.5% above the market.
This is one way to find value without it being a value trap.
For this particular screen, we have drilled down to the stocks with the highest Piotroski F-Score of 9. I will present the results of the screen below and then will have some first impressions of each stock. We can continue discussions of individual stocks in the new Value Investors Network Community on X (Join the community, it is free and open, and you are able to ask me and other investors questions).
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Learn more about Piotroski F-Score metric below:
As I mentioned, the formula is High Piotroski F-Score + Undervaluation = Profits. With this in mind, let’s take a look at each of these stocks below:
INFU: InfuSystems Holdings is a patient care and medical device provider. Its forward P/E is 16 and the PEG ratio is 1, so the company appears to be reasonably valued by the markets.
HSTM: HealthStream  provides workforce and provider solutions for healthcare organizations. Its business model is primarily subscription based. The stock appears to be richly valued and I will pass on it for now.
CNMD: Conmed Corp is a Utica, New York-based medical equipment company that focuses on sports medicine procedures and general surgeries. Forward P/E is 12.1 and appears fairly valued at the first glance.
SWKH: SWK Holdings Corp is a healthcare capital provider. The company offers financing solutions to various life science companies, institutions, and inventors. The valuation metrics do not present enough to interest me yet.
KGEI: Kolibri Global Energy Inc is a North American energy company focused on finding and exploiting energy projects in oil, gas, and clean and sustainable energy. Great margins and cheap valuation along with high double digit growth expected next year. I am concerned about its low current ratio of 0.7. But the debt load is low. This is worth checking out and understanding the cause of the low current ratio and whether that is an issue.
SBH: Sally Beauty Holdings Inc is a professional beauty-products retailer based in the United States. It is a cyclical stock and we may be in a phase where consumer spending in this category is at decline. Not surprisingly, forward P/E is low at 4.5 and a low PEG ratio of 0.4. Interesting enough to check it out. I am adding to my watchlist.
NATH: Nathan’s Famous Inc is an owner of fast food franchises in the United States. Pass for valuation.
TBLA: Taboola.com Ltd is a technology company that powers recommendations across the Open Web with an artificial intelligence-based, algorithmic engine. Again, pass for valuation.
PRM: Perimeter Solutions Inc is a solutions provider for the Fire Safety and Specialty Products industries. Pass for valuation. I think CE is a better option in specialty Chemicals sector.
One stock added to the watchlist, this is quite a good yield from the screen. Once the research is complete, it will be posted for the Inner Circle members.
Shailesh Kumar, MBA is the founder of Astute Investor’s Calculus, where he shares high-conviction small-cap value ideas, stock reports, and investing strategies.
His work has been featured in the New York Times and profiled on Wikipedia. He previously ran Value Stock Guide, one of the earliest value investing platforms online.
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