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After looking at Gr. Sarantis S.A.'s (ATH:SAR) latest earnings announcement (31 December 2018), I found it useful to revisit the company's performance in the past couple of years and assess this against the most recent figures. 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.
Could SAR beat the long-term trend and outperform its industry?
SAR's trailing twelve-month earnings (from 31 December 2018) of €33m has jumped 14% 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 16%, indicating the rate at which SAR is growing has slowed down. To understand what's happening, let's look at what's going on with margins and if the whole industry is feeling the heat.
In terms of returns from investment, Gr. Sarantis has fallen short of achieving a 20% return on equity (ROE), recording 15% instead. However, its return on assets (ROA) of 9.5% exceeds the GR Personal Products industry of 7.7%, indicating Gr. Sarantis has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Gr. Sarantis’s debt level, has increased over the past 3 years from 13% to 15%.
What does this mean?
Gr. Sarantis'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 Gr. Sarantis gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research Gr. Sarantis to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SAR’s future growth? Take a look at our free research report of analyst consensus for SAR’s outlook.
- Financial Health: Are SAR’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 31 December 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.