Aggregated Micro Power Holdings plc (LON:AMPH): Should The Recent Earnings Drop Worry You?
Assessing Aggregated Micro Power Holdings plc’s (AIM:AMPH) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess AMPH’s latest performance announced on 30 September 2017 and evaluate these figures to its historical trend and industry movements. Check out our latest analysis for Aggregated Micro Power Holdings
Commentary On AMPH’s Past Performance
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess different companies on a more comparable basis, using new information. For Aggregated Micro Power Holdings, its latest trailing-twelve-month earnings is £0.6M, which compared to last year’s level, has declined by a substantial -48.39%. Since these values are somewhat short-term thinking, I’ve calculated an annualized five-year value for Aggregated Micro Power Holdings’s net income, which stands at -£3.0M. This means even though earnings declined against last year, in the long run, Aggregated Micro Power Holdings’s earnings have been increasing on average.
What’s the driver of this growth? Let’s take a look at whether it is only owing to industry tailwinds, or if Aggregated Micro Power Holdings has experienced some company-specific growth. The rise in earnings seems to be propelled by a strong top-line increase overtaking its growth rate of expenses. Though this has led to a margin contraction, it has made Aggregated Micro Power Holdings more profitable. Scanning growth from a sector-level, the UK independent power and renewable electricity producers industry has been growing its average earnings by double-digit 43.21% over the past year, and 11.30% over the previous five years. This shows that whatever tailwind the industry is profiting from, Aggregated Micro Power Holdings has not been able to leverage it as much as its average peer.
What does this mean?
Though Aggregated Micro Power Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies are profitable, but have volatile earnings, can have many factors affecting its business. I suggest you continue to research Aggregated Micro Power Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is AMPH’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
