Yahoo Finance Did Canlan Ice Sports Corp’s (TSE:ICE) Recent Earnings Growth Beat The Trend?
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Canlan Ice Sports Corp (TSE:ICE) useful as an attempt to give more color around how Canlan Ice Sports is currently performing.
See our latest analysis for Canlan Ice Sports
Could ICE beat the long-term trend and outperform its industry?
ICE’s trailing twelve-month earnings (from 30 June 2018) of CA$4.2m has jumped 23.5% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -0.5%, indicating the rate at which ICE is growing has accelerated. What’s the driver of this growth? Let’s see whether it is only owing to an industry uplift, or if Canlan Ice Sports has experienced some company-specific growth.
Over the past couple of years, Canlan Ice Sports top-line expansion has outpaced earnings and the growth rate of expenses. Though this has caused a margin contraction, it has lessened Canlan Ice Sports’s earnings contraction.
Viewing growth from a sector-level, the Canadian hospitality industry has been growing its average earnings by double-digit 16.6% over the previous twelve months, and 23.5% over the past half a decade. This growth is a median of profitable companies of 15 Hospitality companies in CA including Stars Group, Boston Pizza Royalties Income Fund and Sir Royalty Income Fund. This shows that any tailwind the industry is deriving benefit from, Canlan Ice Sports is capable of amplifying this to its advantage.
In terms of returns from investment, Canlan Ice Sports has fallen short of achieving a 20% return on equity (ROE), recording 8.7% instead. Furthermore, its return on assets (ROA) of 5.3% is below the CA Hospitality industry of 7.9%, indicating Canlan Ice Sports’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Canlan Ice Sports’s debt level, has increased over the past 3 years from 0.3% to 4.7%.
What does this mean?
Canlan Ice Sports’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Canlan Ice Sports gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Canlan Ice Sports to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for ICE’s future growth? Take a look at our free research report of analyst consensus for ICE’s outlook.
Financial Health: Are ICE’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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
