For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Grieg Seafood ASA's (OB:GSF) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
Could GSF beat the long-term trend and outperform its industry?
GSF's trailing twelve-month earnings (from 30 June 2019) of kr978m has jumped 25% 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 37%, indicating the rate at which GSF is growing has slowed down. To understand what's happening, let's examine what's occurring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Grieg Seafood has invested its equity funds well leading to a 25% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 11% exceeds the NO Food industry of 8.7%, indicating Grieg Seafood has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Grieg Seafood’s debt level, has declined over the past 3 years from 21% to 19%.
What does this mean?
Grieg Seafood's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Companies that have performed well in the past, such as Grieg Seafood gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Grieg Seafood to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for GSF’s future growth? Take a look at our free research report of analyst consensus for GSF’s outlook.
- Financial Health: Are GSF’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 30 June 2019. 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 firstname.lastname@example.org. 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.