Measuring Public Joint Stock Company Uralkali’s (MISX:URKA) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess URKA’s recent performance announced on 30 June 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Uralkali
How URKA fared against its long-term earnings performance and 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 technique enables me to assess different stocks in a uniform manner using new information. For Uralkali, its latest trailing-twelve-month earnings is US$943.36M, which, in comparison to the prior year’s level, has escalated by a non-trivial 67.80%. Given that these figures are somewhat short-term, I’ve determined an annualized five-year value for Uralkali’s net income, which stands at US$729.73M This means that, on average, Uralkali has been able to steadily improve its net income over the past few years as well.
What’s enabled this growth? Let’s take a look at if it is merely a result of industry tailwinds, or if Uralkali has seen some company-specific growth. Although both top-line and bottom-line growth rates in the past few years, were, on average, negative, earnings were more so. While this has led to a margin contraction, it has moderated Uralkali’s earnings contraction. Inspecting growth from a sector-level, the RU chemicals industry has been enduring some headwinds in the previous twelve months, leading to an average earnings drop of -9.48%. This is a major change, given that the industry has constantly been delivering a a notable growth of 19.23% in the past half a decade. This means whatever recent headwind the industry is enduring, the impact on Uralkali has been softer relative to its peers.
What does this mean?
Uralkali’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Uralkali has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Uralkali to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is URKA’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 URKA 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 URKA 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 30 June 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.