Assessing High Ground Enterprise Ltd.’s (NSE:HIGHGROUND) 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 High Ground Enterprise is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its construction industry peers.
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Were HIGHGROUND’s earnings stronger than its past performances and the industry?
HIGHGROUND’s trailing twelve-month earnings (from 31 March 2018) of ₹160m has jumped 42% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 38%, indicating the rate at which HIGHGROUND is growing has accelerated. How has it been able to do this? Let’s take a look at if it is merely due to an industry uplift, or if High Ground Enterprise has seen some company-specific growth.
In terms of returns from investment, High Ground Enterprise has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 6.5% exceeds the IN Construction industry of 5.3%, indicating High Ground Enterprise has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for High Ground Enterprise’s debt level, has increased over the past 3 years from 23% to 27%.
What does this mean?
High Ground Enterprise’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 High Ground Enterprise gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research High Ground Enterprise to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for HIGHGROUND’s future growth? Take a look at our free research report of analyst consensus for HIGHGROUND’s outlook.
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Financial Health: Are HIGHGROUND’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.
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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.