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After reading Odd Molly International AB (publ)’s (OM:ODD) latest earnings update (31 December 2017), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether ODD has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways. See our latest analysis for Odd Molly International

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

For the most up-to-date info, 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 technique enables me to assess different stocks on a similar basis, using the most relevant data points. For Odd Molly International, its most recent earnings (trailing twelve month) is -KR6.27M, which, relative to last year’s figure, has turned from positive to negative. Given that these figures may be relatively short-term, I have calculated an annualized five-year value for ODD’s earnings, which stands at KR5.57M.

We can further analyze Odd Molly International’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Odd Molly International’s top-line has risen by a mere 8.42%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the SE luxury industry has been growing its average earnings by double-digit 15.65% in the prior twelve months, and 12.48% over the past half a decade. This means whatever tailwind the industry is enjoying, Odd Molly International has not been able to leverage it as much as its industry peers.

What does this mean?

Though Odd Molly International’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Odd Molly International may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Odd Molly International to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is ODD’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 ODD 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 ODD 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.