For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at P/F Bakkafrost’s (OB:BAKKA) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Did BAKKA perform worse than its track record and industry?
BAKKA’s trailing twelve-month earnings (from 30 September 2018) of ø945m has declined by -13% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 10%, indicating the rate at which BAKKA is growing has slowed down. What could be happening here? Well, let’s look at what’s occurring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, P/F Bakkafrost 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 17% exceeds the NO Food industry of 12%, indicating P/F Bakkafrost has used its assets more efficiently. However, its return on capital (ROC), which also accounts for P/F Bakkafrost’s debt level, has declined over the past 3 years from 28% to 21%.
What does this mean?
P/F Bakkafrost’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors affecting its business. You should continue to research P/F Bakkafrost to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BAKKA’s future growth? Take a look at our free research report of analyst consensus for BAKKA’s outlook.
- Financial Health: Are BAKKA’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 September 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.