Examining Public Joint Stock Company Acron’s (MCX:AKRN) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess AKRN’s latest performance announced on 31 March 2018 and weight these figures against its longer term trend and industry movements.
How AKRN fared against its long-term earnings performance and its industryAKRN’s trailing twelve-month earnings (from 31 March 2018) of RUруб15.88b has increased by 6.0% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 2.1%, indicating the rate at which AKRN is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is solely a result of industry tailwinds, or if Acron has seen some company-specific growth.
The ascend in earnings seems to be propelled by a substantial top-line increase beating its growth rate of expenses. Though this resulted in a margin contraction, it has made Acron more profitable. Looking at growth from a sector-level, the RU chemicals industry has been enduring some headwinds in the previous year, leading to an average earnings drop of -20.3%. This is a major change, given that the industry has constantly been delivering a a robust growth of 12.9% in the past half a decade. This growth is a median of profitable companies of 7 Chemicals companies in RU including KuibyshevAzot, PJSC PhosAgro and Uralkali. This shows that whatever near-term headwind the industry is enduring, Acron is relatively better-cushioned than its peers.In terms of returns from investment, Acron has fallen short of achieving a 20% return on equity (ROE), recording 19.5% instead. Furthermore, its return on assets (ROA) of 10.7% is below the RU Chemicals industry of 11.1%, indicating Acron’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Acron’s debt level, has increased over the past 3 years from 4.7% to 14.8%.
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? I suggest you continue to research Acron to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AKRN’s future growth? Take a look at our free research report of analyst consensus for AKRN’s outlook.
- Financial Health: Are AKRN’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 March 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 email@example.com.