In This Article:
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Borregaard ASA’s (OB:BRG) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
Check out our latest analysis for Borregaard
Was BRG’s recent earnings decline indicative of a tough track record?
BRG’s trailing twelve-month earnings (from 30 June 2018) of øre506m has declined by -17% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 15%, indicating the rate at which BRG is growing has slowed down. Why is this? Well, let’s look at what’s going on with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Borregaard has fallen short of achieving a 20% return on equity (ROE), recording 16% instead. However, its return on assets (ROA) of 9.5% exceeds the NO Chemicals industry of 6.1%, indicating Borregaard has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Borregaard’s debt level, has declined over the past 3 years from 15% to 14%.
What does this mean?
Borregaard’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have volatile earnings, can have many factors influencing its business. I suggest you continue to research Borregaard to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for BRG’s future growth? Take a look at our free research report of analyst consensus for BRG’s outlook.
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Financial Health: Are BRG’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.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.