For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Public Joint Stock Company BANK URALSIB’s (MISX:USBN) 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. Check out our latest analysis for BANK URALSIB

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

For the purpose of this commentary, I like 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 allows me to examine many different companies in a uniform manner using the most relevant data points. For BANK URALSIB, its most recent earnings (trailing twelve month) is RUРУБ2.44B, which, relative to last year’s level, has taken a dive by a large -92.87%. Since these values may be somewhat short-term, I have determined an annualized five-year value for USBN’s net income, which stands at RUРУБ3.66B This doesn’t look much better, as earnings seem to have gradually been falling over time.

What could be happening here? Let’s examine what’s transpiring with margins and if the rest of the industry is experiencing the hit as well. Over the last few years, revenue growth has failed to keep up which suggests that BANK URALSIB’s bottom line has been driven by unmaintainable cost-cutting. Inspecting growth from a sector-level, the RU banks industry has been ramping up average earnings growth of 76.10% in the previous twelve months, and a flatter -0.13% over the last five years. This means that, in the recent industry expansion, BANK URALSIB has not been able to leverage it as much as its industry peers.

What does this mean?

Though BANK URALSIB’s past data is helpful, it is only one aspect of my investment thesis. Generally companies that endure an extended period of decline in earnings are going through some sort of reinvestment phase with the aim of keeping up with the recent industry disruption and growth. You should continue to research BANK URALSIB to get a better picture of the stock by looking at:

• 1. Financial Health: Is USBN’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 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.