When Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING SA. (WSE:FSG) announced its most recent earnings (30 September 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see FSG has performed. Check out our latest analysis for Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING
Did FSG’s recent earnings growth beat the long-term trend and the industry?
I look at the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to examine different companies on a similar basis, using new information. For Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING, its most recent bottom-line (trailing twelve month) is ZŁ2.23M, which, in comparison to the previous year’s level, has rocketed up by over 100%. Given that these figures are somewhat nearsighted, I’ve determined an annualized five-year value for FSG’s net income, which stands at ZŁ8.18M This means that, although earnings increased from last year’s level, over the longer term, Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING’s earnings have been declining on average.
What could be happening here? Let’s examine what’s occurring with margins and whether the rest of the industry is experiencing the hit as well. Revenue growth in the last few years, has been positive, however earnings growth has been falling. This means Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING has been growing expenses, which is harming margins and earnings, and is not a sustainable practice. Viewing growth from a sector-level, the PL machinery industry has been growing, albeit, at a subdued single-digit rate of 6.24% in the past twelve months, . This is a turnaround from a volatile drop of -5.48% in the previous few years. This means that, in the recent industry expansion, Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING is able to amplify this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There could be factors that are influencing the entire industry thus the high industry growth rate over the same time frame. I recommend you continue to research Fabryki Sprzetu i Narzedzi Górniczych Grupa Kapitalowa FASING to get a more holistic view of the stock by looking at: