Will Science In Sport's (LON:SIS) share price suffer because of its poor F-Score?

It's hard to keep tabs on hundreds of companies, but that's what we have to do if we want to find overlooked investment opportunities. Sometimes there just isn't time to dig through the annual accounts of multiple companies, however.

Thankfully there are measures like the Piotroski F-Score, which distill a wealth of financial data into one easily comparable score. Unfortunately, what the F-Score algorithm says for Consumer Defensives operator Science In Sport (LON:SIS) is not good. First a little bit more on what this number means.

What the Piotroski F-Score says about Science In Sport (LON:SIS)

The Piotroski F-Score is a nine-strong checklist split up into three sections, each looking at a different part of a company's financial situation. Unlike most ratios, the F-Score looks more deeply into the direction in which a company’s financial health is moving.

Piotroski found that weak stocks with an F-Score of 2 or less are five times more likely to either go bankrupt or delist due to financial problems. Working our way through Piotroski's checklist, we can see that Science In Sport (LON:SIS) gets a lowly F-Score of 2 out of a possible 9...

This means that not only is Science In Sport financial health deteriorating, it currently fits in with the stocks that Piotroski identified as being five times more likely to go bankrupt or delist. 

Looking at the group's recent financial results, we can see that for the fiscal year ended 31 December 2018, Science in Sport PLC revenues increased 37% to £21.3m but Net loss increased 63% to £5.9m. The group has been loss-making ever since its flotation, although revenue has been growing at pace.

That said, Science in Sport has had to raise money from shareholders almost every year since its IPO and, if its one-year relative strength of -33.4% is anything to go by, there are signs that patience may be running thin.

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