Measuring NamSys Inc’s (TSXV:CTZ) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CTZ’s recent performance announced on 31 January 2018 and compare these figures to its historical trend and industry movements. Check out our latest analysis for NamSys
Commentary On CTZ’s Past Performance
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 method enables me to examine many different companies in a uniform manner using new information. For NamSys, its latest trailing-twelve-month earnings is CA$923.95K, which, in comparison to last year’s level, has climbed up by 12.03%. Since these values are fairly nearsighted, I have created an annualized five-year figure for NamSys’s earnings, which stands at CA$502.25K This shows that, on average, NamSys has been able to increasingly raise its earnings over the past couple of years as well.What’s enabled this growth? Let’s take a look at whether it is only owing to industry tailwinds, or if NamSys has seen some company-specific growth. Over the past couple of years, NamSys expanded its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Inspecting growth from a sector-level, the Canadian software industry has been growing its average earnings by double-digit 11.98% over the past twelve months, and 22.85% over the previous five years. This suggests that whatever uplift the industry is gaining from, NamSys is able to leverage this to its advantage.
What does this mean?
Though NamSys’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as NamSys gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research NamSys to get a better picture of the stock by looking at:
- 1. Financial Health: Is CTZ’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 CTZ 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 CTZ 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.