After reading Willamette Valley Vineyards, Inc.’s (NASDAQ:WVVI) most recent earnings announcement (30 September 2018), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. 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.
How Well Did WVVI Perform?
WVVI’s trailing twelve-month earnings (from 30 September 2018) of US$2.2m has jumped 11% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 7.2%, indicating the rate at which WVVI is growing has accelerated. What’s enabled this growth? Let’s take a look at if it is solely a result of an industry uplift, or if Willamette Valley Vineyards has experienced some company-specific growth.
In terms of returns from investment, Willamette Valley Vineyards has fallen short of achieving a 20% return on equity (ROE), recording 6.8% instead. Furthermore, its return on assets (ROA) of 4.4% is below the US Beverage industry of 7.3%, indicating Willamette Valley Vineyards’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Willamette Valley Vineyards’s debt level, has declined over the past 3 years from 9.8% to 6.5%.
What does this mean?
Though Willamette Valley Vineyards’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Willamette Valley Vineyards to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for WVVI’s future growth? Take a look at our free research report of analyst consensus for WVVI’s outlook.
- Financial Health: Are WVVI’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.