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After looking at Cpl Resources plc's (ISE:DQ5) latest earnings update (31 December 2018), I found it helpful to revisit the company's performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings.
See our latest analysis for Cpl Resources
How Did DQ5's Recent Performance Stack Up Against Its Past?
DQ5's trailing twelve-month earnings (from 31 December 2018) of €18m has jumped 25% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.2%, indicating the rate at which DQ5 is growing has accelerated. What's the driver of this growth? Let's see whether it is merely attributable to an industry uplift, or if Cpl Resources has seen some company-specific growth.
In terms of returns from investment, Cpl Resources has fallen short of achieving a 20% return on equity (ROE), recording 18% instead. However, its return on assets (ROA) of 11% exceeds the IE Professional Services industry of 6.5%, indicating Cpl Resources has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Cpl Resources’s debt level, has increased over the past 3 years from 17% to 20%.
What does this mean?
Cpl Resources's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Cpl Resources has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Cpl Resources to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for DQ5’s future growth? Take a look at our free research report of analyst consensus for DQ5’s outlook.
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Financial Health: Are DQ5’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.
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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.