Assessing Fresh Del Monte Produce Inc’s (NYSE:FDP) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Fresh Del Monte Produce is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its food industry peers. View our latest analysis for Fresh Del Monte Produce
Was FDP’s weak performance lately a part of a long-term decline?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This enables me to analyze different stocks in a uniform manner using the most relevant data points. For Fresh Del Monte Produce, its most recent bottom-line (trailing twelve month) is US$139.10M, which, in comparison to the prior year’s level, has fallen by -0.59%. Since these values may be somewhat short-term thinking, I have created an annualized five-year figure for FDP’s earnings, which stands at US$105.01M This shows that, on average, Fresh Del Monte Produce has been able to increase its earnings over the past few years.
What’s the driver of this growth? Well, let’s take a look at whether it is merely due to an industry uplift, or if Fresh Del Monte Produce has seen some company-specific growth. Over the last few years, Fresh Del Monte Produce increased its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the US food industry has been growing, albeit, at a muted single-digit rate of 5.41% in the past year, and 7.37% over the past five years. This shows that any uplift the industry is deriving benefit from, Fresh Del Monte Produce has not been able to leverage it as much as its average peer.
What does this mean?
Though Fresh Del Monte Produce’s past data is helpful, it is only one aspect of my investment thesis. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. You should continue to research Fresh Del Monte Produce to get a more holistic view of the stock by looking at:
- 1. Future Outlook: What are well-informed industry analysts predicting for FDP’s future growth? Take a look at our free research report of analyst consensus for FDP’s outlook.
- 2. Financial Health: Is FDP’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.
- 3. 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 29 September 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.