Understanding BE Semiconductor Industries NV’s (AMS:BESI) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how BE Semiconductor Industries is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period.
Did BESI’s recent earnings growth beat the long-term trend and the industry?
BESI’s trailing twelve-month earnings (from 30 September 2018) of €157m has increased by 7.3% 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 38%, indicating the rate at which BESI is growing has slowed down. To understand what’s happening, let’s examine what’s occurring with margins and if the rest of the industry is experiencing the hit as well.
In terms of returns from investment, BE Semiconductor Industries has invested its equity funds well leading to a 43% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 21% exceeds the NL Semiconductor industry of 7.7%, indicating BE Semiconductor Industries has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for BE Semiconductor Industries’s debt level, has increased over the past 3 years from 16% to 30%.
What does this mean?
BE Semiconductor Industries’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 BE Semiconductor Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research BE Semiconductor Industries to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for BESI’s future growth? Take a look at our free research report of analyst consensus for BESI’s outlook.
- Financial Health: Are BESI’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 email@example.com.