Shareholders Can Be Confident That Bidvest Group's (JSE:BVT) Earnings Are High Quality

By
Simply Wall St
Published
September 10, 2021
JSE:BVT
Source: Shutterstock

The Bidvest Group Limited (JSE:BVT) just reported healthy earnings but the stock price didn't move much. Investors are probably missing some underlying factors which are encouraging for the future of the company.

See our latest analysis for Bidvest Group

earnings-and-revenue-history
JSE:BVT Earnings and Revenue History September 11th 2021

The Impact Of Unusual Items On Profit

Importantly, our data indicates that Bidvest Group's profit was reduced by R804m, due to unusual items, over the last year. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And that's hardly a surprise given these line items are considered unusual. If Bidvest Group doesn't see those unusual expenses repeat, then all else being equal we'd expect its profit to increase over the coming year.

That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.

Our Take On Bidvest Group's Profit Performance

Because unusual items detracted from Bidvest Group's earnings over the last year, you could argue that we can expect an improved result in the current quarter. Because of this, we think Bidvest Group's earnings potential is at least as good as it seems, and maybe even better! Furthermore, it has done a great job growing EPS over the last year. Of course, we've only just scratched the surface when it comes to analysing its earnings; one could also consider margins, forecast growth, and return on investment, among other factors. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. While conducting our analysis, we found that Bidvest Group has 2 warning signs and it would be unwise to ignore them.

Today we've zoomed in on a single data point to better understand the nature of Bidvest Group's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying to be useful.

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