Even for a small-cap company such as Newfoundland Capital Corporation Limited (TSX:NCC.A), which has a market capitalization of CAD $239.83M, EPS growth of 22.91% over the past year is impressive. But for long-term investors, improvement in performance over time and a company’s earnings growth against the industry are also important considerations. To answer these questions, I weigh Newfoundland Capital’s EPS growth over the past recorded year through these simple metrics. Check out our latest analysis for Newfoundland Capital
Could NCC.A beat the long-term trend and outperform its industry?
To avoid volatility in annual earnings, I use NCC.A’s best fit version of past five year average earnings growth and turns out that the company’s trailing 12 months’ EPS growth of 22.91% was higher than the five-year average growth of 13.84%, indicating that its earnings growth accelerated over the past year compared to its long-term average. We found that NCC.A is on a path of improving earnings growth; however, we also want to check whether this recent improvement is better than the broader Media industry’s performance.
Not only did NCC.A beat the long-term trend, it turned out to be a fairly strong company in the Media industry, which saw a decline in earnings of -18.2% over the past year.
Newfoundland Capital’s track record indicates strong performance as the company displayed improved earnings results relative to the past five years. Additionally, its positive earnings compared to a downturn in the industry shows its resilience in tough times. However, the stock may not make for a good investment if this positive growth is already priced into its valuation. In order to make a well-informed decision on the stock’s investment, we will need to look at other factors such as its intrinsic value compared to its current price.
I recommend you check out our latest free analysis report on Newfoundland Capital to see what are NCC.A’s growth prospects and whether it could be considered an undervalued opportunity.
PS. If you are not interested in Newfoundland Capital anymore, you can use our free platform to see my list of over 50 stocks with a high growth potential.