Where Clairvest Group Inc (TSE:CVG) Stands In Terms Of Earnings Growth Against Its Industry
In this commentary, I will examine Clairvest Group Inc’s (TSX:CVG) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the capital markets industry performed. As an investor, I find it beneficial to assess CVG’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. See our latest analysis for Clairvest Group
Commentary On CVG’s Past Performance
I prefer to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique allows me to analyze different stocks in a uniform manner using the latest information. For Clairvest Group, its most recent trailing-twelve-month earnings is CA$122.42M, which, in comparison to the previous year’s level, has escalated by an impressive 74.58%. Since these values may be relatively short-term, I have estimated an annualized five-year value for Clairvest Group’s earnings, which stands at CA$43.99M This shows that, generally, Clairvest Group has been able to steadily raise its earnings over the last couple of years as well.
How has it been able to do this? Well, let’s take a look at whether it is solely due to industry tailwinds, or if Clairvest Group has experienced some company-specific growth. In the past couple of years, Clairvest Group grew its bottom line faster than revenue by successfully controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the Canadian capital markets industry has been enduring some headwinds over the previous twelve months, leading to an average earnings drop of -8.19%. This is a significant change, given that the industry has constantly been delivering a a solid growth of 15.94% in the last five years. This means that any near-term headwind the industry is experiencing, Clairvest Group is less exposed compared to its peers.
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? You should continue to research Clairvest Group to get a more holistic view of the stock by looking at:
1. Financial Health: Is CVG’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 CVG 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 CVG 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.
