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After reading Pulz Electronics Limited’s (NSE:PULZ) latest earnings update (31 March 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 PULZ has outperformed, or whether it is simply riding an industry wave. Below is a brief commentary on my key takeaways.
Commentary On PULZ’s Past Performance
PULZ’s trailing twelve-month earnings (from 31 March 2018) of ₹16m has jumped 21% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 53%, indicating the rate at which PULZ is growing has slowed down. To understand what’s happening, let’s take a look at what’s occurring with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Pulz Electronics has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 9.9% exceeds the IN Consumer Durables industry of 7.0%, indicating Pulz Electronics has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Pulz Electronics’s debt level, has increased over the past 3 years from 6.9% to 18%.
What does this mean?
Pulz Electronics’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Pulz Electronics gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Pulz Electronics to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for PULZ’s future growth? Take a look at our free research report of analyst consensus for PULZ’s outlook.
- Financial Health: Are PULZ’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 March 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 email@example.com.