For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Concentric AB (publ) (STO:COIC) useful as an attempt to give more color around how Concentric is currently performing.
How Did COIC’s Recent Performance Stack Up Against Its Past?
COIC’s trailing twelve-month earnings (from 31 December 2018) of kr405m has jumped 34% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 11%, indicating the rate at which COIC is growing has accelerated. What’s enabled this growth? Let’s see whether it is only owing to an industry uplift, or if Concentric has experienced some company-specific growth.
In terms of returns from investment, Concentric has invested its equity funds well leading to a 39% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 18% exceeds the SE Machinery industry of 8.8%, indicating Concentric has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Concentric’s debt level, has increased over the past 3 years from 21% to 29%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 25% to 18% over the past 5 years.
What does this mean?
Though Concentric’s past data is helpful, it is only one aspect of my investment thesis. 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 Concentric to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for COIC’s future growth? Take a look at our free research report of analyst consensus for COIC’s outlook.
- Financial Health: Are COIC’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 email@example.com. 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.