The stock was sluggish on the back of Yamashin-Filter Corp.'s (TSE:6240) recent earnings report. Our analysis suggests that there are some reasons for hope that investors should be aware of.
Check out our latest analysis for Yamashin-Filter
The Impact Of Unusual Items On Profit
For anyone who wants to understand Yamashin-Filter's profit beyond the statutory numbers, it's important to note that during the last twelve months statutory profit was reduced by JP¥268m due to unusual items. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Yamashin-Filter to produce a higher profit next year, all else being equal.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
Our Take On Yamashin-Filter's Profit Performance
Unusual items (expenses) detracted from Yamashin-Filter's earnings over the last year, but we might see an improvement next year. Based on this observation, we consider it likely that Yamashin-Filter's statutory profit actually understates its earnings potential! And the EPS is up 22% over the last twelve months. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. Every company has risks, and we've spotted 1 warning sign for Yamashin-Filter you should know about.
This note has only looked at a single factor that sheds light on the nature of Yamashin-Filter's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
About TSE:6240
Solid track record with excellent balance sheet and pays a dividend.
