Analyzing Skellerup Holdings Limited’s (NZSE:SKL) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess SKL’s recent performance announced on 31 December 2018 and compare these figures to its long-term trend and industry movements.
Commentary On SKL’s Past Performance
SKL’s trailing twelve-month earnings (from 31 December 2018) of NZ$29m has jumped 17% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -5.6%, indicating the rate at which SKL is growing has accelerated. What’s enabled this growth? Well, let’s take a look at whether it is solely owing to industry tailwinds, or if Skellerup Holdings has experienced some company-specific growth.
In terms of returns from investment, Skellerup Holdings has fallen short of achieving a 20% return on equity (ROE), recording 17% instead. However, its return on assets (ROA) of 12% exceeds the NZ Machinery industry of 4.9%, indicating Skellerup Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Skellerup Holdings’s debt level, has increased over the past 3 years from 17% to 19%.
What does this mean?
Skellerup Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Skellerup Holdings to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SKL’s future growth? Take a look at our free research report of analyst consensus for SKL’s outlook.
- Financial Health: Are SKL’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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.