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Assessing Public Joint-Stock Company Moscow United Electric Grid Company’s (MISX:MSRS) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess MSRS’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Moscow United Electric Grid
Was MSRS weak performance lately part of a long-term decline?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 technique enables me to examine different stocks on a similar basis, using the most relevant data points. For Moscow United Electric Grid, its most recent earnings (trailing twelve month) is RUРУБ3.08B, which, in comparison to the previous year’s level, has dropped by a large -67.21%. Given that these figures are relatively nearsighted, I’ve computed an annualized five-year value for MSRS’s earnings, which stands at RUРУБ13.54B This doesn’t seem to paint a better picture, as earnings seem to have gradually been falling over time.
Why could this be happening? Well, let’s take a look at what’s transpiring with margins and whether the rest of the industry is feeling the heat. Revenue growth in the last few years, has been positive, yet earnings growth has been declining. This suggest that Moscow United Electric Grid has been growing expenses, which is hurting margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the RU electric utilities industry has been growing, albeit, at a subdued single-digit rate of 7.42% in the past year, and 9.06% over the past five years. This suggests that whatever tailwind the industry is profiting from, Moscow United Electric Grid has not been able to reap as much as its industry peers.
What does this mean?
Though Moscow United Electric Grid’s past data is helpful, it is only one aspect of my investment thesis. Generally companies that face a drawn out period of decline in earnings are going through some sort of reinvestment phase in order to keep up with the latest industry disruption and expansion. You should continue to research Moscow United Electric Grid to get a more holistic view of the stock by looking at: