When Core-Mark Holding Company, Inc. (NASDAQ:CORE) released its most recent earnings update (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Core-Mark Holding Company performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see CORE has performed.
Could CORE beat the long-term trend and outperform its industry?
CORE’s trailing twelve-month earnings (from 31 December 2018) of US$46m has jumped 36% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -2.0%, indicating the rate at which CORE is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is only owing to an industry uplift, or if Core-Mark Holding Company has seen some company-specific growth.
In terms of returns from investment, Core-Mark Holding Company has fallen short of achieving a 20% return on equity (ROE), recording 8.0% instead. Furthermore, its return on assets (ROA) of 3.6% is below the US Retail Distributors industry of 7.1%, indicating Core-Mark Holding Company’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Core-Mark Holding Company’s debt level, has declined over the past 3 years from 14% to 7.3%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 19% to 70% 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 Core-Mark Holding Company to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CORE’s future growth? Take a look at our free research report of analyst consensus for CORE’s outlook.
- Financial Health: Are CORE’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.
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