Understanding P/F Bakkafrost’s (OB:BAKKA) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how P/F Bakkafrost is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. Check out our latest analysis for P/F Bakkafrost
Did BAKKA perform worse than its track record and industry?BAKKA’s trailing twelve-month earnings (from 31 March 2018) of øre704.67m has declined by -41.50% 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 20.38%, indicating the rate at which BAKKA is growing has slowed down. What could be happening here? Well, let’s look at what’s transpiring with margins and whether the whole industry is feeling the heat.
Over the past few years, revenue growth has failed to keep up which suggests that P/F Bakkafrost’s bottom line has been driven by unsustainable cost-reductions. Viewing growth from a sector-level, the NO food industry has been relatively flat in terms of earnings growth in the prior year, levelling off from a robust 27.05% over the past half a decade. This suggests that any near-term headwind the industry is facing, it’s hitting P/F Bakkafrost harder than its peers.In terms of returns from investment, P/F Bakkafrost has not invested its equity funds well, leading to a 18.11% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 12.93% exceeds the NO Food industry of 12.74%, indicating P/F Bakkafrost has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for P/F Bakkafrost’s debt level, has declined over the past 3 years from 29.06% to 16.53%.
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 volatile earnings, can have many factors influencing its business. I suggest you 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: Is 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.