Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess CSS Industries Inc’s (NYSE:CSS) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for CSS Industries
Could CSS beat the long-term trend and outperform its industry?
I like to use data from the most recent 12 months, 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 allows me to assess different companies on a similar basis, using the most relevant data points. For CSS Industries, its most recent bottom-line (trailing twelve month) is $20.7M, which, against last year’s figure, has escalated by a significant 62.33%. Since these values are relatively short-term, I’ve calculated an annualized five-year value for CSS’s net income, which stands at $18.4M. This means on average, CSS Industries has been able to steadily improve its profits over the last few years as well.
What’s enabled this growth? Let’s take a look at whether it is only due to an industry uplift, or if CSS Industries has seen some company-specific growth. Over the last few years, CSS Industries increased bottom-line, while its top-line declined, by efficiently controlling its costs. This has caused to a margin expansion and profitability over time. Viewing growth from a sector-level, the US consumer durables industry has been growing its average earnings by double-digit 10.61% in the prior year, and 14.81% over the past five. This means whatever tailwind the industry is gaining from, CSS Industries is able to amplify this to its advantage.
What does this mean?
Though CSS Industries’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as CSS Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research CSS Industries to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for CSS’s future growth? Take a look at our free research report of analyst consensus for CSS’s outlook.
- 2. Financial Health: Is CSS’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.