When Wynnstay Group plc (LON:WYN) released its most recent earnings update (30 April 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Wynnstay Group’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not WYN actually performed well. Below is a quick commentary on how I see WYN has performed.
Did WYN beat its long-term earnings growth trend and its industry?
WYN’s trailing twelve-month earnings (from 30 April 2018) of UK£7m has jumped 15% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -0.07%, indicating the rate at which WYN is growing has accelerated. What’s enabled this growth? Let’s see if it is merely owing to industry tailwinds, or if Wynnstay Group has seen some company-specific growth.
In terms of returns from investment, Wynnstay Group has fallen short of achieving a 20% return on equity (ROE), recording 7.7% instead. Furthermore, its return on assets (ROA) of 4.4% is below the GB Food industry of 5.2%, indicating Wynnstay Group’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Wynnstay Group’s debt level, has declined over the past 3 years from 10% to 9.4%.
What does this mean?
Though Wynnstay Group’s past data is helpful, it is only one aspect of my investment thesis. While Wynnstay Group has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research Wynnstay Group to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for WYN’s future growth? Take a look at our free research report of analyst consensus for WYN’s outlook.
- Financial Health: Are WYN’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 April 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.