Investors with a long-term horizong may find it valuable to assess American National Bankshares Inc’s (NASDAQ:AMNB) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how American National Bankshares is currently performing. View our latest analysis for American National Bankshares
How Did AMNB’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This blend allows me to analyze many different companies on a more comparable basis, using the most relevant data points. For American National Bankshares, its most recent earnings (trailing twelve month) is US$15.25M, which, against the prior year’s level, has fallen by -6.45%. Given that these figures may be somewhat short-term thinking, I’ve estimated an annualized five-year figure for American National Bankshares’s net income, which stands at US$14.36M This suggests that even though earnings growth was negative from the prior year, over the long run, American National Bankshares’s profits have been growing on average.
What’s enabled this growth? Let’s take a look at whether it is only because of industry tailwinds, or if American National Bankshares has experienced some company-specific growth. The ascend in earnings seems to be bolstered by a solid top-line increase beating its growth rate of costs. Though this brought about a margin contraction, it has made American National Bankshares more profitable. Looking at growth from a sector-level, the US banks industry has been growing, albeit, at a unexciting single-digit rate of 3.80% in the previous year, and 8.38% over the last five years. This means whatever near-term headwind the industry is facing, it’s hitting American National Bankshares harder than its peers.
What does this mean?
Though American National Bankshares’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. I suggest you continue to research American National Bankshares to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for AMNB’s future growth? Take a look at our free research report of analyst consensus for AMNB’s outlook.
- 2. Financial Health: Is AMNB’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.
- 3. 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 31 December 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.