How Does Jiajiafu Modern Agriculture Limited's (ASX:JJF) Earnings Growth Stack Up Against Industry Performance?
Examining Jiajiafu Modern Agriculture Limited's (ASX:JJF) 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 JJF's latest performance announced on 31 December 2018 and compare these figures to its longer term trend and industry movements.
View our latest analysis for Jiajiafu Modern Agriculture
How Well Did JJF Perform?
JJF's trailing twelve-month earnings (from 31 December 2018) of AU$2.6m has jumped 11% 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 28%, indicating the rate at which JJF is growing has slowed down. Why could this be happening? Well, let's examine what's going on with margins and if the whole industry is facing the same headwind.
In terms of returns from investment, Jiajiafu Modern Agriculture has fallen short of achieving a 20% return on equity (ROE), recording 6.1% instead. However, its return on assets (ROA) of 6.3% exceeds the AU Food industry of 5.1%, indicating Jiajiafu Modern Agriculture has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Jiajiafu Modern Agriculture’s debt level, has increased over the past 3 years from 4.6% to 14%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 105% to 0.5% over the past 5 years.
What does this mean?
Though Jiajiafu Modern Agriculture's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Jiajiafu Modern Agriculture gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Jiajiafu Modern Agriculture to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for JJF’s future growth? Take a look at our free research report of analyst consensus for JJF’s outlook.
Financial Health: Are JJF’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.
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.
