After looking at Public Joint Stock Company Uralkali’s (MISX:URKA) latest earnings announcement (30 June 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 Uralkali’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for Uralkali
Could URKA beat the long-term trend and outperform its industry?
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 enables me to assess different companies on a similar basis, using the latest information. For Uralkali, its latest earnings (trailing twelve month) is US$943.36M, which, in comparison to the prior year’s level, has risen by an impressive 67.80%. Since these values may be relatively short-term thinking, I’ve determined an annualized five-year figure for URKA’s net income, which stands at US$729.73M This means generally, Uralkali has been able to steadily grow its earnings over the past few years as well.What’s the driver of this growth? Let’s see whether it is solely because of an industry uplift, or if Uralkali has seen some company-specific growth. Although both top-line and bottom-line growth rates in the last couple of years, were, on average, negative, earnings were more so. While this resulted in 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 past year, 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 previous five years. This means that any near-term headwind the industry is experiencing, Uralkali is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Uralkali gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Uralkali to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
- 1. Financial Health: Is URKA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important 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 this 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 a free list of these great stocks here.