After reading Patriot National Bancorp Inc’s (NASDAQ:PNBK) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Patriot National Bancorp
Were PNBK’s earnings stronger than its past performances and the industry?
I prefer 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 technique enables me to examine different stocks on a similar basis, using new information. For Patriot National Bancorp, its latest trailing-twelve-month earnings is US$4.15M, which compared to the prior year’s figure, has climbed up by over 100%. Given that these values may be fairly myopic, I’ve determined an annualized five-year value for Patriot National Bancorp’s net income, which stands at -US$296.80K This means that, generally, Patriot National Bancorp has been able to steadily grow its profits over the last few years as well.
What’s the driver of this growth? Let’s see if it is merely owing to industry tailwinds, or if Patriot National Bancorp has experienced some company-specific growth. In the past couple of years, Patriot National Bancorp grew its bottom line faster than revenue by efficiently controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the US banks industry has been growing, albeit, at a subdued single-digit rate of 8.49% over the previous year, and a substantial 10.95% over the past five. This shows that any uplift the industry is deriving benefit from, Patriot National Bancorp is capable of leveraging this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Patriot National Bancorp to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PNBK’s future growth? Take a look at our free research report of analyst consensus for PNBK’s outlook.
- Financial Health: Is PNBK’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.
- 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 December 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.