Measuring Independent News & Media plc’s (ISE:IPDC) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IPDC’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Independent News & Media
Was IPDC weak performance lately part of a long-term decline?
I like to 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 method enables me to analyze different stocks on a similar basis, using new information. For Independent News & Media, its most recent trailing-twelve-month earnings is €12.50M, which, in comparison to the previous year’s level, has declined by a substantial -75.15%. Since these values may be relatively nearsighted, I have estimated an annualized five-year value for Independent News & Media’s earnings, which stands at -€2.64M This suggests that even though earnings declined against last year, in the long run, Independent News & Media’s profits have been growing on average.
What’s enabled this growth? Let’s take a look at whether it is solely a result of industry tailwinds, or if Independent News & Media has seen some company-specific growth. Over the past few years, Independent News & Media grew bottom-line, while its top-line declined, by effectively managing its costs. This has caused to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the IE media industry has been growing, albeit, at a unexciting single-digit rate of 9.81% over the past twelve months, and 8.28% over the past five years. This means any tailwind the industry is enjoying, Independent News & Media has not been able to gain as much as its average peer.
What does this mean?
Independent News & Media’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors influencing its business. I suggest you continue to research Independent News & Media to get a more holistic view of the stock by looking at:
-
Future Outlook: What are well-informed industry analysts predicting for IPDC’s future growth? Take a look at our free research report of analyst consensus for IPDC’s outlook.
-
Financial Health: Is IPDC’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.
-
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.