Assessing Aegean Marine Petroleum Network Inc’s (NYSE:ANW) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ANW’s recent performance announced on 30 September 2017 and evaluate these figures to its longer term trend and industry movements. See our latest analysis for Aegean Marine Petroleum Network
Was ANW’s recent earnings decline worse than the long-term trend and the industry?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to examine various companies in a uniform manner using the latest information. For Aegean Marine Petroleum Network, its latest trailing-twelve-month earnings is $13.2M, which, in comparison to the previous year’s level, has sunken by a significant -69.76%. Given that these figures may be somewhat myopic, I’ve estimated an annualized five-year value for ANW’s net income, which stands at $22.7M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been diminishing over time.
Why is this? Well, let’s take a look at what’s occurring with margins and whether the entire industry is facing the same headwind. Over the last few years, revenue growth has not been able to keep up with, earnings, which indicates that Aegean Marine Petroleum Network’s bottom line has been driven by unsustainable cost-cutting. Scanning growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 18.32% in the prior year, . This is a change from a volatile drop of -7.52% in the last couple of years. This means that, in the recent industry expansion, Aegean Marine Petroleum Network has not been able to gain as much as its average peer.
What does this mean?
Though Aegean Marine Petroleum Network’s past data is helpful, it is only one aspect of my investment thesis. Usually companies that experience a prolonged period of decline in earnings are undergoing some sort of reinvestment phase with the aim of keeping up with the recent industry growth and disruption. You should continue to research Aegean Marine Petroleum Network to get a better picture of the stock by looking at:
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1. Financial Health: Is ANW’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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2. Valuation: What is ANW 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 ANW is currently mispriced by the market.
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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.