Does Aberdeen International Inc’s (TSE:AAB) Past Performance Indicate A Stronger Future?
Understanding how Aberdeen International Inc (TSX:AAB) is performing as a company requires looking at more than just a years’ earnings. Today I will run you through a basic sense check to gain perspective on how Aberdeen International is doing by comparing its latest earnings with its long-term trend as well as the performance of its capital markets industry peers. Check out our latest analysis for Aberdeen International
Were AAB’s earnings stronger than its past performances and the industry?
I prefer 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 similar basis, using the most relevant data points. For Aberdeen International, its most recent trailing-twelve-month earnings is CA$10.73M, which compared to the previous year’s figure, has moved up by 13.58%. Since these values may be fairly nearsighted, I’ve computed an annualized five-year value for Aberdeen International’s net income, which stands at -CA$10.46M This means on average, Aberdeen International has been able to gradually improve its bottom line over the past few years as well.
What’s enabled this growth? Well, let’s take a look at if it is only a result of an industry uplift, or if Aberdeen International has experienced some company-specific growth. In the last few years, Aberdeen International grew its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Inspecting growth from a sector-level, the Canadian capital markets industry has been growing, albeit, at a unexciting single-digit rate of 3.22% in the past twelve months, and a substantial 14.59% over the previous five years. This means that whatever near-term headwind the industry is enduring, Aberdeen International is relatively better-cushioned than its peers.
What does this mean?
Aberdeen International’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Aberdeen International has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Aberdeen International to get a more holistic view of the stock by looking at:
1. Financial Health: Is AAB’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. Valuation: What is AAB worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AAB is currently mispriced by the market.
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 October 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.
