Examining REX American Resources Corporation’s (NYSE:REX) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess REX’s latest performance announced on 31 October 2017 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for REX American Resources
Did REX’s recent earnings growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 allows me to analyze different companies on a similar basis, using the latest information. “For REX American Resources, its “, most recent bottom-line is $33.0M, which, against last year’s figure, has risen by 39.75%. Since these figures may be relatively short-term thinking, I’ve created an annualized five-year value for REX’s net income, which stands at $31.4M. This suggests that, generally, REX American Resources has been able to gradually improve its earnings over the past couple of years as well.
How has it been able to do this? Well, let’s take a look at if it is merely due to industry tailwinds, or if REX American Resources has experienced some company-specific growth. Over the past few years, REX American Resources increased its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Viewing growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 17.75% over the previous twelve months, . This is a change from a volatile drop of -7.15% in the last couple of years. This means that, in the recent industry expansion, REX American Resources is capable of leveraging this to its advantage.
What does this mean?
REX American Resources’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 REX American Resources gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research REX American Resources to get a better picture of the stock by looking at:
1. Financial Health: Is REX’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 REX 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 REX 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.