Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Amerisafe Inc’s (NASDAQ:AMSF) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Did AMSF perform worse than its track record and industry?
AMSF’s trailing twelve-month earnings (from 30 September 2018) of US$53m has declined by -17% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 4.4%, indicating the rate at which AMSF is growing has slowed down. Why is this? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is feeling the heat.
In terms of returns from investment, Amerisafe has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 3.4% exceeds the US Insurance industry of 2.1%, indicating Amerisafe has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Amerisafe’s debt level, has declined over the past 3 years from 6.8% to 5.8%.
What does this mean?
Amerisafe’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. You should continue to research Amerisafe to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AMSF’s future growth? Take a look at our free research report of analyst consensus for AMSF’s outlook.
- Financial Health: Are AMSF’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.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at email@example.com.