In this article, I will take a look at Aberdeen International Inc’s (TSX:AAB) most recent earnings update (31 October 2017) and compare these latest figures against its performance over the past few years, along with how the rest of AAB’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Aberdeen International
Commentary On AAB’s Past Performance
For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 allows me to assess many different companies on a more comparable basis, using the latest information. For Aberdeen International, its most recent bottom-line (trailing twelve month) is CA$10.73M, which, relative to the previous year’s figure, has risen by 13.58%. Since these figures may be somewhat short-term, I’ve calculated an annualized five-year figure for AAB’s earnings, which stands at -CA$10.46M This means that, generally, Aberdeen International has been able to increasingly raise its net income over the past couple of years as well.What’s enabled this growth? Let’s take a look at if it is merely because of an industry uplift, or if Aberdeen International has experienced some company-specific growth. In the past couple of years, Aberdeen International grew its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Inspecting growth from a sector-level, the Canadian capital markets industry has been growing, albeit, at a muted single-digit rate of 6.64% in the previous twelve months, and a substantial 18.82% over the past half a decade. This means whatever uplift the industry is deriving benefit from, Aberdeen International is capable of leveraging this to its advantage.
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? I recommend you continue to research Aberdeen International to get a better picture of the stock by looking at:
- 1. Financial Health: Is AAB’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 AAB 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 AAB 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.