Examining Heidelberger Beteiligungsholding AG’s (DB:IPO) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess IPO’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Heidelberger Beteiligungsholding
Was IPO’s weak performance lately a part of a long-term decline?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method allows me to analyze many different companies on a similar basis, using the latest information. For Heidelberger Beteiligungsholding, its most recent earnings (trailing twelve month) is €887.64K, which, in comparison to the prior year’s figure, has sunken by a large -64.67%. Given that these figures may be fairly myopic, I have calculated an annualized five-year figure for IPO’s earnings, which stands at €1.60M This doesn’t look much better, as earnings seem to have steadily been diminishing over the longer term.
Why could this be happening? Let’s examine what’s going on with margins and if the whole industry is facing the same headwind. In the past couple of years, revenue growth has failed to keep up which indicates that Heidelberger Beteiligungsholding’s bottom line has been driven by unmaintainable cost-cutting. Scanning growth from a sector-level, the DE capital markets industry has been growing its average earnings by double-digit 13.70% in the past year, and 13.62% over the past half a decade. This means whatever tailwind the industry is enjoying, Heidelberger Beteiligungsholding has not been able to reap as much as its industry peers.
What does this mean?
Though Heidelberger Beteiligungsholding’s past data is helpful, it is only one aspect of my investment thesis. Generally companies that face a prolonged period of reduction in earnings are undergoing some sort of reinvestment phase in order to keep up with the latest industry growth and disruption. I recommend you continue to research Heidelberger Beteiligungsholding to get a more holistic view of the stock by looking at:
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Financial Health: Is IPO’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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Valuation: What is IPO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether IPO is currently mispriced by the market.
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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.
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.