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When Philly Shipyard ASA (OB:PHLY) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Philly Shipyard has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see PHLY has performed. See our latest analysis for Philly Shipyard
How Did PHLY’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, 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 method enables me to assess different companies in a uniform manner using the most relevant data points. For Philly Shipyard, its most recent bottom-line (trailing twelve month) is US$67.22M, which compared to the previous year’s level, has jumped by a substantial 73.92%. Since these values are relatively short-term, I’ve created an annualized five-year value for Philly Shipyard’s net income, which stands at US$18.33M This means on average, Philly Shipyard has been able to steadily improve its bottom line over the past couple of years as well.
What’s the driver of this growth? Let’s see whether it is only owing to industry tailwinds, or if Philly Shipyard has experienced some company-specific growth. In the past couple of years, Philly Shipyard expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the NO machinery industry has been increasing average earnings growth of 73.92% in the past year, and a strong 33.65% over the previous five years.
What does this mean?
Philly Shipyard’s track record can be a valuable insight into its earnings performance, but it certainly 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 Philly Shipyard to get a more holistic view of the stock by looking at:
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1. Financial Health: Is PHLY’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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2. Valuation: What is PHLY 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 PHLY is currently mispriced by the market.
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3. 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.