Measuring Danieli & C. Officine Meccaniche S.p.A.’s (BIT:DAN) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess DAN’s recent performance announced on 30 June 2018 and weigh these figures against its long-term trend and industry movements.
Were DAN’s earnings stronger than its past performances and the industry?
DAN’s trailing twelve-month earnings (from 30 June 2018) of €58m has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -26%, indicating the rate at which DAN is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at whether it is only attributable to an industry uplift, or if Danieli & C. Officine Meccaniche has experienced some company-specific growth.
In terms of returns from investment, Danieli & C. Officine Meccaniche has fallen short of achieving a 20% return on equity (ROE), recording 3.1% instead. Furthermore, its return on assets (ROA) of 1.2% is below the IT Machinery industry of 4.2%, indicating Danieli & C. Officine Meccaniche’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Danieli & C. Officine Meccaniche’s debt level, has declined over the past 3 years from 7.0% to 4.7%.
What does this mean?
Though Danieli & C. Officine Meccaniche’s past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be variables that are influencing the industry as a whole, thus the high industry growth rate over the same time period. I recommend you continue to research Danieli & C. Officine Meccaniche to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DAN’s future growth? Take a look at our free research report of analyst consensus for DAN’s outlook.
- Financial Health: Are DAN’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 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.