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Understanding Iberpapel Gestión SA.’s (BME:IBG) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Iberpapel Gestión is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. View our latest analysis for Iberpapel Gestión
Were IBG’s earnings stronger than its past performances and the industry?
I prefer to use data from the most recent 12 months, 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 technique enables me to examine various companies in a uniform manner using new information. For Iberpapel Gestión, its most recent earnings (trailing twelve month) is €22.91M, which, in comparison to the previous year’s figure, has moved up by 13.93%. Since these values are fairly myopic, I’ve calculated an annualized five-year value for Iberpapel Gestión’s net income, which stands at €16.56M This suggests that, generally, Iberpapel Gestión has been able to gradually raise its earnings over the past few years as well.
How has it been able to do this? Let’s take a look at whether it is solely because of an industry uplift, or if Iberpapel Gestión has experienced some company-specific growth. Though both top-line and bottom-line growth rates in the last few years, were, on average, negative, earnings were more so. While this has led to a margin contraction, it has softened Iberpapel Gestión’s earnings contraction. Eyeballing growth from a sector-level, the ES forestry industry has been growing its average earnings by double-digit 24.80% in the prior twelve months, and 14.90% over the past five years. This shows that whatever tailwind the industry is deriving benefit from, Iberpapel Gestión has not been able to reap as much as its average peer.
What does this mean?
Iberpapel Gestión’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Iberpapel Gestión to get a more holistic view of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for IBG’s future growth? Take a look at our free research report of analyst consensus for IBG’s outlook.
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2. Financial Health: Is IBG’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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3. 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.