Measuring Asta Funding Inc’s (NASDAQ:ASFI) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess ASFI’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Asta Funding
Was ASFI’s recent earnings decline worse than the long-term trend and the industry?
I like to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to examine different stocks in a uniform manner using the latest information. For Asta Funding, its most recent bottom-line (trailing twelve month) is -US$705.00K, which compared to last year’s figure, has turned from positive to negative. Since these values may be somewhat short-term thinking, I have computed an annualized five-year figure for ASFI’s net income, which stands at US$4.95M.
We can further examine Asta Funding’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Asta Funding’s top-line has grown by a mere 2.75%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Viewing growth from a sector-level, the US consumer finance industry has been growing, albeit, at a subdued single-digit rate of 4.65% in the previous twelve months, and 9.01% over the last five years. This means that any near-term headwind the industry is facing, it’s hitting Asta Funding harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Asta Funding may be facing and whether management guidance has consistently been met in the past. You should continue to research Asta Funding to get a better picture of the stock by looking at:
- 1. Financial Health: Is ASFI’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 June 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.