Yahoo Finance Want To Invest In Bodycote plc (LON:BOY)? Here's How It Performed Lately
After looking at Bodycote plc's (LON:BOY) latest earnings announcement (30 June 2019), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.
Check out our latest analysis for Bodycote
Was BOY's recent earnings decline indicative of a tough track record?
BOY's trailing twelve-month earnings (from 30 June 2019) of UK£100m has declined by -4.1% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 10%, indicating the rate at which BOY is growing has slowed down. Why is this? Let's examine what's transpiring with margins and if the rest of the industry is facing the same headwind.
In terms of returns from investment, Bodycote has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 9.3% exceeds the GB Machinery industry of 6.9%, indicating Bodycote has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Bodycote’s debt level, has increased over the past 3 years from 13% to 15%.
What does this mean?
Though Bodycote's past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have capricious earnings, can have many factors influencing its business. I suggest you continue to research Bodycote to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BOY’s future growth? Take a look at our free research report of analyst consensus for BOY’s outlook.
Financial Health: Are BOY’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 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.
