After looking at Sbanken ASA’s (OB:SBANK) latest earnings announcement (31 December 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Sbanken’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. See our latest analysis for Sbanken
How Well Did SBANK Perform?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to analyze different stocks in a uniform manner using new information. For Sbanken, its most recent bottom-line (trailing twelve month) is ØRE634.37M, which, against the prior year’s level, has dropped by -17.44%. Since these figures may be somewhat myopic, I have calculated an annualized five-year figure for Sbanken’s net income, which stands at ØRE404.23M This means even though earnings growth was negative from the prior year, over time, Sbanken’s profits have been growing on average.How has it been able to do this? Let’s take a look at if it is merely a result of an industry uplift, or if Sbanken has experienced some company-specific growth. Over the last couple of years, Sbanken increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the NO banks industry has been growing, albeit, at a muted single-digit rate of 9.83% in the past year, and 7.20% over the past five years. This means that whatever uplift the industry is benefiting from, Sbanken has not been able to gain as much as its industry peers.
What does this mean?
Though Sbanken’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 influencing its business. You should continue to research Sbanken to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SBANK’s future growth? Take a look at our free research report of analyst consensus for SBANK’s outlook.
- Financial Health: Is SBANK’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.
- 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.