Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at QV Equities Limited’s (ASX:QVE) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for QV Equities

How Did QVE’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 method allows me to analyze different companies on a more comparable basis, using new information. For QV Equities, its latest trailing-twelve-month earnings is AU$8.93M, which compared to the previous year’s figure, has risen by 29.86%. Since these figures are somewhat nearsighted, I’ve estimated an annualized five-year value for QV Equities’s earnings, which stands at AU$6.44M This suggests that, on average, QV Equities has been able to gradually grow its net income over the past couple of years as well.

What’s the driver of this growth? Well, let’s take a look at whether it is only attributable to industry tailwinds, or if QV Equities has experienced some company-specific growth. Over the past couple of years, QV Equities increased its bottom line faster than revenue by effectively 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 subdued single-digit rate of 8.71% over the prior year, and a substantial 16.58% over the past half a decade. This suggests that any tailwind the industry is deriving benefit from, QV Equities is capable of amplifying this to its advantage.

What does this mean?

Though QV Equities’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as QV Equities gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research QV Equities to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is QVE’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. Valuation: What is QVE 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 QVE is currently mispriced by the market.

• 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.