Where Oceania Healthcare Limited (NZE:OCA) Stands In Terms Of Earnings Growth Against Its Industry

Measuring Oceania Healthcare Limited's (NZSE:OCA) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess OCA's recent performance announced on 30 November 2017 and weigh these figures against its long-term trend and industry movements. View our latest analysis for Oceania Healthcare

Did OCA beat its long-term earnings growth trend and its industry?

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to examine different stocks on a similar basis, using the most relevant data points. For Oceania Healthcare, its latest trailing-twelve-month earnings is NZ$65.43M, which, relative to the previous year's figure, has jumped up by 39.93%. Since these values may be relatively short-term, I’ve calculated an annualized five-year figure for Oceania Healthcare's earnings, which stands at NZ$13.83M This suggests that, on average, Oceania Healthcare has been able to steadily raise its earnings over the last few years as well.

What's enabled this growth? Let's take a look at if it is only owing to industry tailwinds, or if Oceania Healthcare has seen some company-specific growth. Over the last few years, Oceania Healthcare increased bottom-line, while its top-line fell, by efficiently controlling its costs. This brought about to a margin expansion and profitability over time. Viewing growth from a sector-level, the NZ healthcare industry has been growing, albeit, at a unexciting single-digit rate of 7.26% in the past year, and a substantial 39.45% over the past half a decade. This suggests that whatever uplift the industry is gaining from, Oceania Healthcare is able to amplify this to its advantage.

What does this mean?

Oceania Healthcare's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Oceania Healthcare has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Oceania Healthcare to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for OCA’s future growth? Take a look at our free research report of analyst consensus for OCA’s outlook.
2. Financial Health: Is OCA’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.
3. 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 November 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.