Want To Invest In Third Point Reinsurance Ltd (NYSE:TPRE)? Here’s How It Performed Lately
Examining Third Point Reinsurance Ltd’s (NYSE:TPRE) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess TPRE’s latest performance announced on 30 September 2017 and weight these figures against its longer term trend and industry movements. Check out our latest analysis for Third Point Reinsurance
Did TPRE beat its long-term earnings growth trend and its industry?
I look at 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 method enables me to analyze many different companies on a similar basis, using the most relevant data points. For Third Point Reinsurance, its latest earnings (trailing twelve month) is US$186.65M, which compared to the prior year’s figure, has risen by a significant 60.50%. Given that these figures may be relatively nearsighted, I’ve created an annualized five-year figure for TPRE’s net income, which stands at US$81.03M This means that, on average, Third Point Reinsurance has been able to consistently grow its net income over the past few years as well.
How has it been able to do this? Let’s take a look at whether it is solely attributable to an industry uplift, or if Third Point Reinsurance has experienced some company-specific growth. In the past couple of years, Third Point Reinsurance top-line expansion has outpaced earnings and the growth rate of expenses. Though this has caused a margin contraction, it has lessened Third Point Reinsurance’s earnings contraction. Eyeballing growth from a sector-level, the US insurance industry has been growing, albeit, at a muted single-digit rate of 5.66% over the prior twelve months, and 8.42% over the past half a decade. This suggests that whatever tailwind the industry is enjoying, Third Point Reinsurance 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 Third Point Reinsurance gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Third Point Reinsurance to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TPRE’s future growth? Take a look at our free research report of analyst consensus for TPRE’s outlook.
2. Financial Health: Is TPRE’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.
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 30 September 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.
