Measuring Sachem Capital Corp’s (NYSEMKT:SACH) track record of past performance is a valuable exercise for investors. It allows us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess SACH’s recent performance announced on 31 March 2018 and compare these figures to its historical trend and industry movements. See our latest analysis for Sachem Capital
Did SACH’s recent earnings growth beat the long-term trend and the industry?SACH’s trailing twelve-month earnings (from 31 March 2018) of US$5.65m has jumped 73.10% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 33.58%, indicating the rate at which SACH is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only a result of an industry uplift, or if Sachem Capital has seen some company-specific growth.
The ascend in earnings seems to be supported by a solid top-line increase overtaking its growth rate of expenses. Though this has caused a margin contraction, it has made Sachem Capital more profitable. Eyeballing growth from a sector-level, the US mortgage industry has been growing, albeit, at a subdued single-digit rate of 8.64% over the prior year, and a substantial 14.14% over the previous five years. This growth is a median of profitable companies of 25 Mortgage companies in US including Harvard Illinois Bancorp, First Bancshares and Broadway Financial. This shows that whatever uplift the industry is benefiting from, Sachem Capital is able to leverage this to its advantage.In terms of returns from investment, Sachem Capital has not invested its equity funds well, leading to a 10.81% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 7.70% exceeds the US Mortgage industry of 0.64%, indicating Sachem Capital has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Sachem Capital’s debt level, has increased over the past 3 years from 9.07% to 10.09%.
What does this mean?
Sachem Capital’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Sachem Capital gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Sachem Capital to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SACH’s future growth? Take a look at our free research report of analyst consensus for SACH’s outlook.
- Financial Health: Is SACH’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.