In This Article:
Today I will examine Detection Technology Oyj’s (HLSE:DETEC) latest earnings update (31 December 2017) and compare these figures against its performance over the past couple of years, in addition to how the rest of DETEC’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Detection Technology Oyj
Did DETEC beat its long-term earnings growth trend and its industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to examine different stocks on a similar basis, using new information. For Detection Technology Oyj, its most recent bottom-line (trailing twelve month) is €15.15M, which compared to the previous year’s figure, has increased by 39.13%. Since these figures are relatively short-term, I’ve calculated an annualized five-year figure for DETEC’s net income, which stands at €5.86M This shows that, on average, Detection Technology Oyj has been able to consistently grow its net income over the past couple of years as well.
How has it been able to do this? Let’s take a look at if it is only due to industry tailwinds, or if Detection Technology Oyj has experienced some company-specific growth. Over the last couple of years, Detection Technology Oyj grew its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the FI electronic industry has been growing its average earnings by double-digit 39.13% in the previous twelve months, and 17.38% over the last five years.
What does this mean?
Though Detection Technology Oyj’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Detection Technology Oyj gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Detection Technology Oyj 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 DETEC’s future growth? Take a look at our free research report of analyst consensus for DETEC’s outlook.
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Financial Health: Is DETEC’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 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.