In This Article:
Assessing Nicolás Correa SA’s (BME:NEA) 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 Nicolás Correa is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its machinery industry peers.
Check out our latest analysis for Nicolás Correa
How NEA fared against its long-term earnings performance and its industry
NEA’s trailing twelve-month earnings (from 30 June 2018) of €5.4m has jumped 16% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 60%, indicating the rate at which NEA is growing has slowed down. To understand what’s happening, let’s look at what’s transpiring with margins and if the entire industry is facing the same headwind.
In terms of returns from investment, Nicolás Correa has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 7.0% exceeds the ES Machinery industry of 6.3%, indicating Nicolás Correa has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Nicolás Correa’s debt level, has increased over the past 3 years from 5.7% to 11%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 68% to 23% over the past 5 years.
What does this mean?
Though Nicolás Correa’s past data is helpful, it is only one aspect of my investment thesis. While Nicolás Correa has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Nicolás Correa to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for NEA’s future growth? Take a look at our free research report of analyst consensus for NEA’s outlook.
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Financial Health: Are NEA’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 30 June 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.