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When Socfinasia S.A. (BDL:SCFNS) released its most recent earnings update (31 December 2018), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Socfinasia performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see SCFNS has performed.
View our latest analysis for Socfinasia
How SCFNS fared against its long-term earnings performance and its industry
SCFNS's trailing twelve-month earnings (from 31 December 2018) of €26m has increased by 4.7% 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 5.7%, indicating the rate at which SCFNS 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 feeling the heat.
In terms of returns from investment, Socfinasia has fallen short of achieving a 20% return on equity (ROE), recording 12% instead. However, its return on assets (ROA) of 7.4% exceeds the LU Food industry of 5.6%, indicating Socfinasia has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Socfinasia’s debt level, has increased over the past 3 years from 12% to 13%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. You should continue to research Socfinasia 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 SCFNS’s future growth? Take a look at our free research report of analyst consensus for SCFNS’s outlook.
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Financial Health: Are SCFNS’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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.