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Assessing Enice Holding Company Limited’s (ASX:ENC) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Enice Holding is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its wireless telecom industry peers. View our latest analysis for Enice Holding
How ENC fared against its long-term earnings performance and its industry
I look at the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This enables me to analyze various companies on a similar basis, using new information. For Enice Holding, its most recent trailing-twelve-month earnings is CN¥60.19M, which, in comparison to the prior year’s level, has risen by 41.65%. Since these values may be somewhat myopic, I’ve created an annualized five-year figure for Enice Holding’s net income, which stands at CN¥26.01M This shows that, on average, Enice Holding has been able to steadily improve its profits over the last few years as well.
How has it been able to do this? Let’s take a look at if it is merely due to an industry uplift, or if Enice Holding has experienced some company-specific growth. Over the last couple of years, Enice Holding grew its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Looking at growth from a sector-level, the Australian wireless telecom industry has been enduring some headwinds over the past twelve months, leading to an average earnings drop of -27.12%. This is a momentous change, given that the industry has constantly been delivering a a robust growth of 38.31% in the past half a decade. This means whatever recent headwind the industry is experiencing, the impact on Enice Holding has been softer relative to its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. While Enice Holding has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Enice Holding to get a better picture of the stock by looking at:
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Financial Health: Is ENC’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.