When Self Storage Group ASA’s (OB:SSG) announced its latest earnings (31 December 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Self Storage Group’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SSG actually performed well. Below is a quick commentary on how I see SSG has performed. See our latest analysis for Self Storage Group
Were SSG’s earnings stronger than its past performances and the industry?
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 analyze different stocks on a more comparable basis, using new information. For Self Storage Group, its latest trailing-twelve-month earnings is ØRE52.02M, which, against last year’s level, has climbed up by an impressive 80.44%. Since these figures may be relatively short-term, I’ve calculated an annualized five-year value for SSG’s earnings, which stands at ØRE37.40M This suggests that, on average, Self Storage Group has been able to consistently improve its bottom line over the past couple of years as well.
What’s enabled this growth? Let’s take a look at if it is solely a result of an industry uplift, or if Self Storage Group has experienced some company-specific growth. The rise in earnings seems to be supported by a solid top-line increase outstripping its growth rate of expenses. Though this has caused a margin contraction, it has made Self Storage Group more profitable. Eyeballing growth from a sector-level, the NO commercial services industry has been growing, albeit, at a unexciting single-digit rate of 5.74% in the past year, and 9.42% over the previous five years. This means whatever tailwind the industry is benefiting from, Self Storage Group is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Self Storage Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Self Storage Group to get a better picture of the stock by looking at:
- 1. Financial Health: Is SSG’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 SSG 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 SSG 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 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.