After reading Craneware plc’s (LON:CRW) latest earnings update (31 December 2018), I found it beneficial to look back at how the company has performed in the past and compare this against the most recent numbers. As a long-term investor I tend to pay attention to earnings trend, rather than a single number at one point in time. I also like to compare against an industry benchmark to understand whether CRW has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways.
How Did CRW’s Recent Performance Stack Up Against Its Past?
CRW’s trailing twelve-month earnings (from 31 December 2018) of US$17m has jumped 15% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 15%, indicating the rate at which CRW is growing has accelerated. What’s the driver of this growth? Let’s take a look at whether it is solely owing to an industry uplift, or if Craneware has seen some company-specific growth.
In terms of returns from investment, Craneware has invested its equity funds well leading to a 30% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 17% exceeds the GB Healthcare Services industry of 7.4%, indicating Craneware has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Craneware’s debt level, has increased over the past 3 years from 27% to 34%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Craneware gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Craneware to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CRW’s future growth? Take a look at our free research report of analyst consensus for CRW’s outlook.
- Financial Health: Are CRW’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 31 December 2018. This may not be consistent with full year annual report figures.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.