For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Omega Flex Inc (NASDAQ:OFLX) useful as an attempt to give more color around how Omega Flex is currently performing.
Commentary On OFLX’s Past Performance
OFLX’s trailing twelve-month earnings (from 30 September 2018) of US$19m has jumped 21% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10%, indicating the rate at which OFLX is growing has accelerated. What’s enabled this growth? Let’s see if it is merely due to industry tailwinds, or if Omega Flex has seen some company-specific growth.
In terms of returns from investment, Omega Flex has invested its equity funds well leading to a 30% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 22% exceeds the US Machinery industry of 6.6%, indicating Omega Flex has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Omega Flex’s debt level, has declined over the past 3 years from 50% to 40%.
What does this mean?
Though Omega Flex’s past data is helpful, it is only one aspect of my investment thesis. While Omega Flex has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Omega Flex to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for OFLX’s future growth? Take a look at our free research report of analyst consensus for OFLX’s outlook.
- Financial Health: Are OFLX’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.