Joseph Piotroski

Joseph D. Piotroski is an American professor who specializes in accounting and financial reporting issues. As of October 2010 he serves as associate professor of accounting at the Stanford University Graduate School of Business. Prior to that, he taught at the University of Chicago Booth School of Business from July 1999 to June 2007.
Piotroski is known in the investing world for an influential 2000 paper he wrote while at the University of Chicago, entitled Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers. In the piece, Piotroski laid out a way (Piotroski F-Score) to buy and short stocks using several accounting-based criteria. His back-testing showed that the method would have produced returns well above the broader market averages over a two-decade period.
Piotroski is a member of the Editorial Advisory Boards of The Accounting Review, the Journal of Accounting Research, and the Journal of Accounting and Economics. His research has been cited in publications such as Bloomberg BusinessWeek, SmartMoney Magazine, and Investor's Business Daily.

Piotroski received a B.S. in accounting from the University of Illinois in 1989, the same year in which he became a certified public accountant in the state of Illinois. From 1989 to 1992, he then worked as a senior tax associate at the firm Coopers & Lybrand.

In 1994, Piotroski received an M.B.A. in finance from Indiana University. While at Indiana, he was a lecturer in Introduction to Financial Accounting from 1992-1994. He received his Ph.D. in accounting from the University of Michigan in 1999 and served as a graduate research assistant and graduate instructor there from 1994-1999. 

After leaving Michigan in 1999, Piotroski took a position as an assistant professor of accounting at the University of Chicago, a post he held from 1999-2003. He then became an associate professor of accounting at the school from 2003-2007. He left the University of Chicago in 2007 to take an associate professor of accounting position at Stanford University. 

Piotroski received widespread publicity within the investment community for his 2000 paper, Value Investing: The Use of Historical Financial Statement Information to Separate Winners from Losers, which appeared in the Journal of Accounting Research (Vol. 38, Supplement: Studies on Accounting Information and the Economics of the Firm).

The paper examined whether a simple accounting-based fundamental analysis stock selection strategy, when applied to a broad portfolio of high book-to-market firms, could impact returns for investors. He began by limiting his search to firms whose book/market ratios (the inverse of the price/book ratio) were in the top 20% of the market. He then ran those firms through an array of tests involving their balance sheets and income statements, using such metrics as the return on assets rate, current ratio, change in gross margin, and change in asset turnover. The Piotroski F-Score is a 9-point valuation metric derived on this research Joseph Piotroski's F-Score.

Through back-testing, Piotroski found that buying the top stocks in the market according to his methodology and shorting those that got the worst scores would have resulted in 23% annualized gains from 1976 through 1996, more than double the S&P 500 broad market index return. His findings were made available to a wider audience via SmartMoney magazine and Bloomberg BusinessWeek.