Has Clairvest Group Inc (TSE:CVG) Improved Earnings Growth In Recent Times?
After reading Clairvest Group Inc’s (TSX:CVG) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Clairvest Group
How Well Did CVG Perform?
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 blend enables me to examine different companies in a uniform manner using new information. For Clairvest Group, its most recent earnings (trailing twelve month) is CA$122.42M, which, in comparison to the previous year’s level, has risen by a significant 74.58%. Given that these values may be relatively short-term, I’ve computed an annualized five-year value for CVG’s earnings, which stands at CA$44.90M This means that, on average, Clairvest Group has been able to steadily raise its earnings over the past couple of years as well.
What’s the driver of this growth? Let’s see if it is merely because of an industry uplift, or if Clairvest Group has seen some company-specific growth. In the last few years, Clairvest Group increased its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Scanning growth from a sector-level, the Canadian capital markets industry has been enduring some headwinds in the previous twelve months, leading to an average earnings drop of -4.36%. This is a significant change, given that the industry has constantly been delivering a a notable growth of 17.92% in the past half a decade. This means whatever near-term headwind the industry is experiencing, the impact on Clairvest Group has been softer relative to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Clairvest Group to get a better picture of the stock by looking at:
Financial Health: Is CVG’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.
Valuation: What is CVG 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 CVG is currently mispriced by the market.
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.