In This Article:
Understanding BT Investment Management Limited’s (ASX:BTT) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how BT Investment Management is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for BT Investment Management
Did BTT beat its long-term earnings growth trend and its industry?
I prefer to 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 blend allows me to examine various companies in a uniform manner using the most relevant data points. For BT Investment Management, its latest earnings (trailing twelve month) is AU$147.46M, which, relative to last year’s level, has grown by a fairly subdued 3.82%. Since these values may be somewhat nearsighted, I have calculated an annualized five-year value for BTT’s net income, which stands at AU$85.48M This means that, generally, BT Investment Management has been able to consistently improve its earnings over the past couple of years as well.
What’s the driver of this growth? Let’s take a look at whether it is only because of an industry uplift, or if BT Investment Management has seen some company-specific growth. Over the past few years, BT Investment Management increased 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 capital markets industry has been growing, albeit, at a muted single-digit rate of 8.71% over the previous year, and a substantial 15.23% over the last five years. This shows that any uplift the industry is deriving benefit from, BT Investment Management has not been able to realize the gains unlike its average peer.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as BT Investment Management gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research BT Investment Management to get a better picture of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for BTT’s future growth? Take a look at our free research report of analyst consensus for BTT’s outlook.
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2. Financial Health: Is BTT’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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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 30 September 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.