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After looking at Masi Agricola S.p.A.'s (BIT:MASI) 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.
Check out our latest analysis for Masi Agricola
Commentary On MASI's Past Performance
MASI's trailing twelve-month earnings (from 31 December 2018) of €7.1m has increased by 5.1% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -6.0%, indicating the rate at which MASI is growing has accelerated. What's the driver of this growth? Let's see if it is merely owing to an industry uplift, or if Masi Agricola has seen some company-specific growth.
In terms of returns from investment, Masi Agricola has fallen short of achieving a 20% return on equity (ROE), recording 5.7% instead. Furthermore, its return on assets (ROA) of 4.6% is below the IT Beverage industry of 5.5%, indicating Masi Agricola's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Masi Agricola’s debt level, has declined over the past 3 years from 9.4% to 6.0%.
What does this mean?
Though Masi Agricola's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be factors that are impacting the industry as a whole, hence the high industry growth rate over the same period of time. I recommend you continue to research Masi Agricola 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 MASI’s future growth? Take a look at our free research report of analyst consensus for MASI’s outlook.
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Financial Health: Are MASI’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.