After looking at ICS Global Limited’s (ASX:ICS) latest earnings announcement (31 December 2017), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether ICS Global’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. View our latest analysis for ICS Global

How Did ICS’s Recent Performance Stack Up Against Its Past?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to assess different companies in a uniform manner using new information. For ICS Global, its most recent trailing-twelve-month earnings is AU$587.07K, which, against the prior year’s figure, has plunged by -25.78%. Since these figures are fairly short-term, I have determined an annualized five-year value for ICS’s net income, which stands at AU$553.50K This means despite the fact that earnings growth was negative against last year, over time, ICS Global’s profits have been rising on average.

What’s the driver of this growth? Let’s see whether it is solely owing to an industry uplift, or if ICS Global has seen some company-specific growth. Over the last few years, ICS Global grew its bottom line faster than revenue by successfully controlling its costs. This has caused a margin expansion and profitability over time. Scanning growth from a sector-level, the Australian healthcare industry has been relatively flat in terms of earnings growth in the past twelve months, evening out from a robust 22.02% over the last five years. This suggests that any near-term headwind the industry is facing, it’s hitting ICS Global harder than its peers.

What does this mean?

ICS Global’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 impacting its business. You should continue to research ICS Global to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is ICS’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.

• 2. 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.