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For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Nurminen Logistics Oyj (HLSE:NLG1V) useful as an attempt to give more color around how Nurminen Logistics Oyj is currently performing. View our latest analysis for Nurminen Logistics Oyj
Did NLG1V beat its long-term earnings growth trend and its industry?
For the purpose of this commentary, I like 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 enables me to assess different companies on a more comparable basis, using the latest information. For Nurminen Logistics Oyj, its most recent bottom-line (trailing twelve month) is -€1.19M, which compared to the previous year’s level, has become less negative. Given that these figures may be somewhat nearsighted, I have determined an annualized five-year figure for Nurminen Logistics Oyj’s net income, which stands at -€2.68M. This shows that, despite the fact that net income is negative, it has become less negative over the years.
We can further assess Nurminen Logistics Oyj’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Nurminen Logistics Oyj has seen an annual decline in revenue of -5.85%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Scanning growth from a sector-level, the FI logistics industry has been growing, albeit, at a unexciting single-digit rate of 8.71% in the prior year, and 7.40% over the past half a decade. This means although Nurminen Logistics Oyj is currently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Though Nurminen Logistics Oyj’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will occur going forward, and when. The most useful step is to examine company-specific issues Nurminen Logistics Oyj may be facing and whether management guidance has regularly been met in the past. You should continue to research Nurminen Logistics Oyj to get a more holistic view of the stock by looking at: