Did Clearwater Seafoods Incorporated’s (TSE:CLR) Recent Earnings Growth Beat The Trend?
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Clearwater Seafoods Incorporated (TSX:CLR) useful as an attempt to give more color around how Clearwater Seafoods is currently performing. Check out our latest analysis for Clearwater Seafoods
How CLR fared against its long-term earnings performance and its industry
For the purpose of this commentary, I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to examine different stocks on a similar basis, using new information. For Clearwater Seafoods, its most recent bottom-line (trailing twelve month) is CA$35.33M, which, in comparison to last year’s figure, has moved up by 25.78%. Given that these values may be fairly short-term, I’ve determined an annualized five-year value for Clearwater Seafoods’s net income, which stands at CA$5.92M This shows that, on average, Clearwater Seafoods has been able to steadily improve its net income over the last couple of years as well.
What’s enabled this growth? Let’s see whether it is only a result of an industry uplift, or if Clearwater Seafoods has seen some company-specific growth. Over the past few years, Clearwater Seafoods expanded its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the Canadian food industry has been growing its average earnings by double-digit 21.97% in the past twelve months, and 16.96% over the past five. This means that whatever uplift the industry is gaining from, Clearwater Seafoods is able to amplify this to its advantage.
What does this mean?
Clearwater Seafoods’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Clearwater Seafoods gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Clearwater Seafoods to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Future Outlook: What are well-informed industry analysts predicting for CLR’s future growth? Take a look at this free research report of analyst consensus for CLR’s outlook.
2. Financial Health: Is CLR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a 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.
