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Investors with a long-term horizong may find it valuable to assess Columbus McKinnon Corporation’s (NASDAQ:CMCO) earnings trend over time and against its industry benchmark as opposed to simply looking at a sincle earnings announcement at one point in time. Below is my commentary, albiet very simple and high-level, on how Columbus McKinnon is currently performing.
How Well Did CMCO Perform?
CMCO’s trailing twelve-month earnings (from 30 September 2018) of US$22m has increased by 8.0% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -29%, indicating the rate at which CMCO is growing has accelerated. What’s the driver of this growth? Let’s see if it is merely a result of an industry uplift, or if Columbus McKinnon has experienced some company-specific growth.
In terms of returns from investment, Columbus McKinnon has fallen short of achieving a 20% return on equity (ROE), recording 5.1% instead. Furthermore, its return on assets (ROA) of 3.6% is below the US Machinery industry of 7.0%, indicating Columbus McKinnon’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Columbus McKinnon’s debt level, has increased over the past 3 years from 8.1% to 9.8%.
What does this mean?
Though Columbus McKinnon’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be variables that are influencing the industry as a whole, hence the high industry growth rate over the same time frame. I recommend you continue to research Columbus McKinnon to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CMCO’s future growth? Take a look at our free research report of analyst consensus for CMCO’s outlook.
- Financial Health: Are CMCO’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 September 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.