Free Cash Flow for FONR

One of my live ports recommended selling FONR in part because an NA for Pr2FrCashFlQ. When I calculate Free Cash Flow directly from the 10Q, however, I get a positive number (in thousands):

Cash from Operations: 4448
CapEx: 387
Dividends: 0

Free Cash Flow = 4061

Have I made a mistake in my calculation, or is this a data issue stemming from the recent 10Q release (yesterday, Feb 09).

Thanks,
Ethan

I looked at the most recent quarterly data for FONR and it shows NA for Cash Flow statement items for Net Income from Cash Flow statement (NetIncCFStmtq), Cash from Operations (OperCashFlq) and Free Cash Flow (FCFq) for the quarter. I think that P123 calcualtes the valuations from these. They can comment.
It looks like P123 does not have the cash flow statement data yet. Also, all the cash flow statement TTMs are NA.
Run a screen using Showvar and you can see this as well or use the Data panels.

Thanks David. It does seem that most–if not all–of the cash flow items are NA. But this appears to contradict what I’m seeing in the 10Q filed with the SEC.

If P123 doesn’t have the cash flow statement yet, why would the port rebalance screen indicate (Y) for a complete statement?

Perhaps someone from P123 can chime in.

i don’t know if this is the answer, but the 10-Q cash flow statement is for the six month period. Quarterly items are supposed to be 3 months.

Yeah, I wondered about that too, but I assumed that Compustat would do the arithmetic to arrive at the correct three month numbers.

I am curious about input from P123 staff on the timeliness of the cash flow statement items as well. I thought it had to be submitted completely like the other two statements every three months. Maybe it does not. Does it?

The report was sufficiently recent that we want to see if the underlying data fills in over the weekend. Hopefully it’s just a slow data entry problem at S&P.

FONR is still showing NAs for cash flow, even after this weekend’s update.

Bump. Still NAs for cash flow.

What are their numbers from their last SEC statement?

I haven’t calculated them all, but for example, it seems to me that free cash flow for the quarter should be approximately $4,061,000.

I say approximately because there is some language in the P123 reference which states that Compustat “standardizes” the data so that the their number may not appear in the original filing. Not sure exactly what this means.

One thing to note about FONR is that the current statement of cash flows is for the trailing six months, so you have to subtract out the values for the first three months of their fiscal year.

Looks like the cash flow statement was updated overnight and all of the NAs are gone. No longer a sell for me.

I guess what I don’t understand is why the update was piecemeal in nature–especially when the port selling it claimed it was a “complete statement”. Seems to me this could cause some real performance discrepancies between simulations and live ports.

Ironically, now that the update appears to be complete, my port claims that it is NOT a complete statement.

I normally ignore the flag. My rank and buy sell rules ignore companies that have NAs. So I would have not Seen this stock.

It would be good to hear from P123 on how data is updated and how the flag is set. This seems to be somewhat unpredictable.

This issue will be resolved after the close today. It’s an issue that affects some of the latest data processed by Compustat. In other words company reports from yesterday are sometimes being ignored because they are flagged with an effective date of today @ midnight. Our engine is very strict with the “effective” dates to avoid look-ahead biases in backtests.

Here are more specifics:

Compustat sometimes sends us the latest data with an “effective” date @ midnight of the current trading day. For example right now it’s 2/19/2016 @ 11:30AM, and there are data points for about 50 companies from Compustat with effective dates of 2/19/2016 @ Midnight. Our servers are ignoring this data since it’s deemed to be in the future in our “end-of-day” world.

We’ve made some fixes to compensate. But we need to investigate this further. Not sure why they chose today’s date @ midnight. The data was obviously processed sometime yesterday. We need to ask Compustat if we can assume any data @ midnight could be used on the upcoming trading session without introducing look-ahead biases in backtests. And what about data that they flagged it at other times ? Where should we draw the line ? We’ll investigate

Thanks for reporting this.

Thanks Marco. As always, I appreciate your compulsive attention to detail.

Thanks Marco. I use data from the cash flow statement extensively in my models and so this is important for me to understand.