Measuring HAEMATO AG's (FRA:HAE) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess HAE's recent performance announced on 31 December 2018 and compare these figures to its historical trend and industry movements.
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Did HAE perform worse than its track record and industry?
HAE's trailing twelve-month earnings (from 31 December 2018) of €6.3m has declined by -9.8% 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 1.6%, indicating the rate at which HAE is growing has slowed down. Why is this? Well, let’s take a look at what’s transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, HAEMATO has fallen short of achieving a 20% return on equity (ROE), recording 8.3% instead. However, its return on assets (ROA) of 6.0% exceeds the DE Healthcare industry of 3.8%, indicating HAEMATO has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for HAEMATO’s debt level, has increased over the past 3 years from 4.5% to 6.6%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 49% to 20% over the past 5 years.
What does this mean?
Though HAEMATO's past data is helpful, it is only one aspect of my investment thesis. Usually companies that experience a drawn out period of reduction in earnings are going through some sort of reinvestment phase Although, if the whole industry is struggling to grow over time, it may be a signal of a structural shift, which makes HAEMATO and its peers a higher risk investment. You should continue to research HAEMATO to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HAE’s future growth? Take a look at our free research report of analyst consensus for HAE’s outlook.
- Financial Health: Are HAE’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.
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