Examining Société Financière des Caoutchoucs Société Anonyme’s (BDL:SOFIN) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess SOFIN’s latest performance announced on 31 December 2017 and weight these figures against its longer term trend and industry movements. View our latest analysis for Société Financière des Caoutchoucs Société Anonyme
Did SOFIN beat its long-term earnings growth trend and its industry?
I use data from the most recent 12 months, 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 allows me to examine different companies in a uniform manner using the latest information. For Société Financière des Caoutchoucs Société Anonyme, its most recent bottom-line (trailing twelve month) is €25.68M, which, in comparison to the prior year’s level, has increased by more than double. Given that these figures are fairly nearsighted, I’ve determined an annualized five-year figure for Société Financière des Caoutchoucs Société Anonyme’s earnings, which stands at €44.82M This means that, while earnings growth from last year was positive, over time, Société Financière des Caoutchoucs Société Anonyme’s earnings have been diminishing on average.
Why could this be happening? Well, let’s look at what’s occurring with margins and whether the entire industry is feeling the heat. Although revenue growth over the last couple of years, has been negative, earnings growth has been declining by even more, suggesting that Société Financière des Caoutchoucs Société Anonyme has been ramping up its expenses. This harms margins and earnings, and is not a sustainable practice. Eyeballing growth from a sector-level, the LU food industry has been growing its average earnings by double-digit 10.11% in the previous year, and a more muted 9.63% over the last five years. This suggests that whatever uplift the industry is enjoying, Société Financière des Caoutchoucs Société Anonyme is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There may be variables that are affecting the entire industry thus the high industry growth rate over the same time period. I recommend you continue to research Société Financière des Caoutchoucs Société Anonyme to get a more holistic view of the stock by looking at: