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Assessing NWS Holdings Limited’s (HKG:659) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 659’s recent performance announced on 30 June 2018 and evaluate these figures to its long-term trend and industry movements.
See our latest analysis for NWS Holdings
Did 659’s recent earnings growth beat the long-term trend and the industry?
659’s trailing twelve-month earnings (from 30 June 2018) of HK$6.1b has increased by 7.8% 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 8.1%, indicating the rate at which 659 is growing has slowed down. What could be happening here? Well, let’s take a look at what’s transpiring with margins and if the rest of the industry is feeling the heat.
In terms of returns from investment, NWS Holdings has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 7.7% exceeds the HK Industrials industry of 2.8%, indicating NWS Holdings has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for NWS Holdings’s debt level, has increased over the past 3 years from 3.7% to 4.3%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 43% to 20% over the past 5 years.
What does this mean?
Though NWS Holdings’s past data is helpful, it is only one aspect of my investment thesis. While NWS Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. You should continue to research NWS Holdings 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 659’s future growth? Take a look at our free research report of analyst consensus for 659’s outlook.
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Financial Health: Are 659’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.