Measuring National Presto Industries Inc’s (NYSE:NPK) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess NPK’s recent performance announced on 01 October 2017 and weigh these figures against its long-term trend and industry movements. View our latest analysis for National Presto Industries

Did NPK’s recent EPS Growth beat the long-term trend and the industry?

To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, 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 assess different companies in a uniform manner using new information. National Presto Industries’s most recent bottom-line is $47M, which, relative to the previous year’s figure, has increased by 20.28%. Since these values may be somewhat nearsighted, I’ve determined an annualized five-year figure for National Presto Industries’s net income, which stands at $42M. This means generally, National Presto Industries has been able to steadily improve its bottom line over the past few years as well.

How has it been able to do this? Let’s see if it is merely owing to an industry uplift, or if National Presto Industries has seen some company-specific growth. In the last few years, although bottom-line growth has seen a decrease, top-line growth has fallen at a faster rate, bringing about a margin expansion and National Presto Industries still maintaining profitability. Looking at growth from a sector-level, the US aerospace and defense industry has been growing its average earnings by double-digit 14.00% in the prior year, and a less exciting 6.11% over the past couple of years. This means that any uplift the industry is profiting from, National Presto Industries is able to amplify this to its advantage.

What does this mean?

National Presto Industries’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as National Presto Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research National Presto Industries to get a more holistic view of the stock by looking at:

1. Financial Health: Is NPK’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.

2. Valuation: What is NPK worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether NPK is currently mispriced by the market.

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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.