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 Gielda Papierów Wartosciowych w Warszawie SA’s (WSE:GPW) 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 GPW beat its long-term earnings growth trend and its industry?GPW’s trailing twelve-month earnings (from 30 June 2018) of zł193.96m has jumped 36.48% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 4.71%, indicating the rate at which GPW is growing has accelerated. What’s enabled this growth? Let’s see if it is only a result of industry tailwinds, or if Gielda Papierów Wartosciowych w Warszawie has experienced some company-specific growth.
In the last few years, Gielda Papierów Wartosciowych w Warszawie expanded its bottom line faster than revenue by efficiently controlling its costs. This has led to a margin expansion and profitability over time. Looking at growth from a sector-level, the PL capital markets industry has been growing its average earnings by double-digit 10.21% over the past year, and a less exciting 6.45% over the past five. This growth is a median of profitable companies of 17 Capital Markets companies in PL including IPOPEMA Securities Spólka Akcyjna, Investment Friends Capital and Private Equity Managers. This shows that any tailwind the industry is enjoying, Gielda Papierów Wartosciowych w Warszawie is able to leverage this to its advantage.In terms of returns from investment, Gielda Papierów Wartosciowych w Warszawie has invested its equity funds well leading to a 23.47% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15.08% exceeds the PL Capital Markets industry of 5.96%, indicating Gielda Papierów Wartosciowych w Warszawie has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Gielda Papierów Wartosciowych w Warszawie’s debt level, has increased over the past 3 years from 15.92% to 21.57%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 42.85% to 29.72% over the past 5 years.
What does this mean?
While past data is useful, it 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? You should continue to research Gielda Papierów Wartosciowych w Warszawie to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GPW’s future growth? Take a look at our free research report of analyst consensus for GPW’s outlook.
- Financial Health: Is GPW’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.
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 email@example.com.