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For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Bâloise Holding AG (SWX:BALN) useful as an attempt to give more color around how Bâloise Holding is currently performing. See our latest analysis for Bâloise Holding
How Well Did BALN Perform?
I look at 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 analyze many different companies on a similar basis, using new information. For Bâloise Holding, its latest earnings (trailing twelve month) is CHF548.00M, which, relative to the prior year’s level, has risen by a relatively subdued 2.47%. Since these values may be somewhat short-term thinking, I have calculated an annualized five-year value for BALN’s net income, which stands at CHF467.89M This means that, on average, Bâloise Holding has been able to consistently grow its profits over the last few years as well.
How has it been able to do this? Let’s take a look at if it is only owing to industry tailwinds, or if Bâloise Holding has seen some company-specific growth. Over the past few years, Bâloise Holding expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the CH insurance industry has been enduring some headwinds over the prior twelve months, leading to an average earnings drop of -2.28%. This is a significant change, given that the industry has been delivering a positive rate of 5.54%, on average, over the last five years. This means whatever near-term headwind the industry is enduring, Bâloise Holding is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Bâloise Holding to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for BALN’s future growth? Take a look at our free research report of analyst consensus for BALN’s outlook.
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Financial Health: Is BALN’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.
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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.