In This Article:
Examining AFT Corporation Limited’s (ASX:AFT) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess AFT’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for AFT
How Did AFT’s Recent Performance Stack Up Against Its Past?
I look at the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to assess various companies in a uniform manner using new information. For AFT, its most recent bottom-line (trailing twelve month) is -AU$380.75K, which, relative to last year’s figure, has become more negative. Given that these values may be fairly short-term, I’ve created an annualized five-year figure for AFT’s net income, which stands at -AU$724.55K. This means that, while net income is negative, it has become less negative over the years.
We can further assess AFT’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years AFT has seen an annual decline in revenue of -49.73%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the Australian building industry has been growing, albeit, at a muted single-digit rate of 7.81% over the prior year, and a substantial 11.08% over the past five. This means whatever uplift the industry is benefiting from, AFT has not been able to gain as much as its average peer.
What does this mean?
Though AFT’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most insightful step is to assess company-specific issues AFT may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research AFT to get a more holistic view of the stock by looking at:
-
Financial Health: Is AFT’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 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.