Examining MMA Capital Management LLC’s (NASDAQ:MMAC) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MMAC’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. See our latest analysis for MMA Capital Management
How Well Did MMAC Perform?
To account for any quarterly or half-yearly updates, 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 various companies on a similar basis, using the latest information. For MMA Capital Management, its most recent bottom-line (trailing twelve month) is US$21.95M, which, in comparison to the previous year’s level, has moved up by 15.06%. Since these figures are fairly short-term thinking, I have computed an annualized five-year value for MMA Capital Management’s earnings, which stands at US$25.72M This means that, despite the fact that earnings increased from last year’s level, over a longer period of time, MMA Capital Management’s earnings have been declining on average.What could be happening here? Well, let’s look at what’s going on with margins and if the rest of the industry is facing the same headwind. Over the last couple of years, revenue growth has failed to keep up with earnings, which indicates that MMA Capital Management’s bottom line has been driven by unmaintainable cost-reductions. Looking at growth from a sector-level, the US mortgage industry has been growing, albeit, at a muted single-digit rate of 8.88% in the past twelve months, and a substantial 13.60% over the last five years. This shows that any tailwind the industry is profiting from, MMA Capital Management is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There could be factors that are influencing the industry as a whole, hence the high industry growth rate over the same time frame. You should continue to research MMA Capital Management to get a more holistic view of the stock by looking at:
- Financial Health: Is MMAC’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.