After reading Münchener Tierpark Hellabrunn AG’s (MUN:MTP) most recent earnings announcement (31 December 2016), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Münchener Tierpark Hellabrunn
How Well Did MTP Perform?
I look at 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 technique enables me to examine many different companies in a uniform manner using the most relevant data points. For Münchener Tierpark Hellabrunn, its latest earnings (trailing twelve month) is €1.30M, which, against the previous year’s level, has fallen by -10.80%. Given that these figures may be somewhat myopic, I’ve calculated an annualized five-year value for MTP’s earnings, which stands at €1.30M This suggests that despite the fact that earnings growth was negative against the prior year, over a longer period of time, Münchener Tierpark Hellabrunn’s earnings have been rising on average.What’s enabled this growth? Let’s take a look at if it is only because of industry tailwinds, or if Münchener Tierpark Hellabrunn has experienced some company-specific growth. Over the last few years, Münchener Tierpark Hellabrunn expanded its bottom line faster than revenue by effectively controlling its costs. This has caused a margin expansion and profitability over time. Viewing growth from a sector-level, the DE hospitality industry has been growing its average earnings by double-digit 20.27% in the prior twelve months, and 11.97% over the past five years. This means any uplift the industry is benefiting from, Münchener Tierpark Hellabrunn has not been able to realize the gains unlike its industry peers.
What does this mean?
Though Münchener Tierpark Hellabrunn’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have volatile earnings, can have many factors impacting its business. You should continue to research Münchener Tierpark Hellabrunn to get a better picture of the stock by looking at:
- 1. Financial Health: Is MTP’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. 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.