Measuring San Juan Basin Royalty Trust’s (NYSE:SJT) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SJT’s recent performance announced on 31 March 2018 and compare these figures to its historical trend and industry movements. Check out our latest analysis for San Juan Basin Royalty Trust
Commentary On SJT’s Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 enables me to analyze many different companies on a more comparable basis, using the most relevant data points. For San Juan Basin Royalty Trust, its latest trailing-twelve-month earnings is US$37.21M, which, against the prior year’s figure, has increased by a substantial 83.40%. Given that these figures may be somewhat nearsighted, I have estimated an annualized five-year figure for SJT’s net income, which stands at US$38.43M This suggests that, while earnings increased from last year’s level, in the long run, San Juan Basin Royalty Trust’s earnings have been falling on average.Why is this? Well, let’s take a look at what’s transpiring with margins and if the entire industry is experiencing the hit as well. In the last couple of years, San Juan Basin Royalty Trust has, on average, delivered negative top- and bottom-line growth. As revenues dropped by more, expenses have been lowered in order to sustain margins – not the most sustainable operating activity. Scanning growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 25.00% over the previous twelve months, . This is a change from a volatile drop of -4.96% in the previous few years. This means that, in the recent industry expansion, San Juan Basin Royalty Trust is capable of amplifying this to its advantage.
What does this mean?
San Juan Basin Royalty Trust’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be variables that are affecting the industry as a whole, thus the high industry growth rate over the same time period. I recommend you continue to research San Juan Basin Royalty Trust to get a better picture of the stock by looking at:
- Financial Health: Is SJT’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.
- Valuation: What is SJT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SJT is currently mispriced by the market.
- 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.