Does Hamburger Hafen und Logistik Aktiengesellschaft’s (FRA:HHFA) 39% Earnings Growth Make It An Outperformer?

After looking at Hamburger Hafen und Logistik Aktiengesellschaft’s (FRA:HHFA) latest earnings announcement (31 December 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. 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.

View our latest analysis for Hamburger Hafen und Logistik

Commentary On HHFA’s Past Performance

HHFA’s trailing twelve-month earnings (from 31 December 2018) of €112m has jumped 39% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 13%, indicating the rate at which HHFA is growing has accelerated. What’s the driver of this growth? Let’s take a look at whether it is solely attributable to industry tailwinds, or if Hamburger Hafen und Logistik has seen some company-specific growth.

DB:HHFA Income Statement, April 17th 2019
DB:HHFA Income Statement, April 17th 2019

In terms of returns from investment, Hamburger Hafen und Logistik has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 6.7% exceeds the DE Infrastructure industry of 5.8%, indicating Hamburger Hafen und Logistik has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Hamburger Hafen und Logistik’s debt level, has increased over the past 3 years from 8.6% to 11%.

What does this mean?

Though Hamburger Hafen und Logistik’s past data is helpful, it is only one aspect of my investment thesis. While Hamburger Hafen und Logistik has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Hamburger Hafen und Logistik to get a more holistic view of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for HHFA’s future growth? Take a look at our free research report of analyst consensus for HHFA’s outlook.
  2. Financial Health: Are HHFA’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.
  3. 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 2018. This may not be consistent with full year annual report figures.

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