Does Gencor Industries, Inc.’s (NASDAQ:GENC) Recent Track Record Look Strong?

After looking at Gencor Industries, Inc.’s (NASDAQ:GENC) latest earnings announcement (31 December 2018), I found it useful to revisit the company’s performance in the past couple of years and assess this against the most recent figures. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether Gencor Industries’s performance has been impacted by industry movements. In this article I briefly touch on my key findings.

View our latest analysis for Gencor Industries

How Did GENC’s Recent Performance Stack Up Against Its Past?

GENC’s trailing twelve-month earnings (from 31 December 2018) of US$11m has jumped 12% compared to the previous year.

However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 27%, indicating the rate at which GENC is growing has slowed down. To understand what’s happening, let’s take a look at what’s occurring with margins and whether the whole industry is feeling the heat.

NasdaqGM:GENC Income Statement, April 3rd 2019
NasdaqGM:GENC Income Statement, April 3rd 2019

In terms of returns from investment, Gencor Industries has fallen short of achieving a 20% return on equity (ROE), recording 7.4% instead. Furthermore, its return on assets (ROA) of 5.7% is below the US Machinery industry of 7.7%, indicating Gencor Industries’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Gencor Industries’s debt level, has increased over the past 3 years from 1.7% to 9.7%.

What does this mean?

Gencor Industries’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. While Gencor Industries 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 Gencor Industries to get a better picture of the stock by looking at:

  1. Future Outlook: What are well-informed industry analysts predicting for GENC’s future growth? Take a look at our free research report of analyst consensus for GENC’s outlook.
  2. Financial Health: Are GENC’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 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 editorial-team@simplywallst.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.