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 Bâloise Holding AG (VTX:BALN) useful as an attempt to give more color around how Bâloise Holding is currently performing.
Did BALN perform worse than its track record and industry?
BALN’s trailing twelve-month earnings (from 30 June 2018) of CHF519m has declined by -15% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 0.4%, indicating the rate at which BALN is growing has slowed down. What could be happening here? Well, let’s look at what’s going on with margins and whether the whole industry is facing the same headwind.
In terms of returns from investment, Bâloise Holding has fallen short of achieving a 20% return on equity (ROE), recording 8.2% instead. Furthermore, its return on assets (ROA) of 0.7% is below the CH Insurance industry of 0.7%, indicating Bâloise Holding’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Bâloise Holding’s debt level, has declined over the past 3 years from 1.5% to 1.1%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Bâloise Holding to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BALN’s future growth? Take a look at our free research report of analyst consensus for BALN’s outlook.
- Financial Health: Are BALN’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 firstname.lastname@example.org.