For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Hollysys Automation Technologies Ltd.'s (NASDAQ:HOLI) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers.
How Did HOLI's Recent Performance Stack Up Against Its Past?
HOLI's trailing twelve-month earnings (from 30 June 2019) of US$125m has jumped 17% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 6.5%, indicating the rate at which HOLI is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is solely due to industry tailwinds, or if Hollysys Automation Technologies has experienced some company-specific growth.
In terms of returns from investment, Hollysys Automation Technologies has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 8.6% exceeds the US Electronic industry of 6.8%, indicating Hollysys Automation Technologies has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Hollysys Automation Technologies’s debt level, has declined over the past 3 years from 17% to 14%.
What does this mean?
Hollysys Automation Technologies's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Hollysys Automation Technologies has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. You should continue to research Hollysys Automation Technologies to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for HOLI’s future growth? Take a look at our free research report of analyst consensus for HOLI’s outlook.
- Financial Health: Are HOLI’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 June 2019. 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.