After looking at Micron Solutions Inc’s (AMEX:MICR) latest earnings announcement (31 March 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Micron Solutions’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for Micron Solutions
How Well Did MICR Perform?
I 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 assess different stocks on a more comparable basis, using new information. For Micron Solutions, its most recent bottom-line (trailing twelve month) is -US$1.32M, which compared to the prior year’s level, has become more negative. Given that these values may be fairly short-term, I have estimated an annualized five-year value for Micron Solutions’s earnings, which stands at -US$1.01M. This doesn’t seem to paint a better picture, as earnings seem to have steadily been getting more and more negative over time.
We can further assess Micron Solutions’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Micron Solutions has seen an annual decline in revenue of -2.39%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the US healthcare services industry has been growing its average earnings by double-digit 27.90% over the prior year, and 19.46% over the past five. This means that any tailwind the industry is enjoying, Micron Solutions has not been able to gain as much as its industry peers.
What does this mean?
Though Micron Solutions’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues Micron Solutions may be facing and whether management guidance has consistently been met in the past. You should continue to research Micron Solutions to get a more holistic view of the stock by looking at:
- Financial Health: Is MICR’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.
- Valuation: What is MICR 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 MICR is currently mispriced by the market.
- 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 March 2018. 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.