Examining Laserbond Limited’s (ASX:LBL) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess LBL’s latest performance announced on 31 December 2017 and compare these figures to its longer term trend and industry movements. Check out our latest analysis for Laserbond
Did LBL’s recent earnings growth beat the long-term trend and the industry?
LBL’s trailing twelve-month earnings (from 31 December 2017) of AU$900.83k has jumped 49.60% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 10.50%, indicating the rate at which LBL is growing has accelerated. How has it been able to do this? Let’s take a look at whether it is solely due to an industry uplift, or if Laserbond has seen some company-specific growth.
Over the past few years, Laserbond increased bottom-line, while its top-line declined, by successfully controlling its costs. This brought about to a margin expansion and profitability over time. Looking at growth from a sector-level, the Australian machinery industry has been growing average earnings growth of 75.50% in the previous twelve months, and a flatter -1.96% over the previous five years. This means that, in the recent industry expansion, Laserbond has not been able to gain as much as its average peer.
In terms of returns from investment, Laserbond has not invested its equity funds well, leading to a 12.75% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 8.14% is below the AU Machinery industry of 8.99%, indicating Laserbond’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Laserbond’s debt level, has increased over the past 3 years from 13.12% to 14.64%.
What does this mean?
Though Laserbond’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 Laserbond to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LBL’s future growth? Take a look at our free research report of analyst consensus for LBL’s outlook.
- Financial Health: Is LBL’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 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.