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Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at DYNAM JAPAN HOLDINGS Co., Ltd.'s (HKG:6889) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers.
See our latest analysis for DYNAM JAPAN HOLDINGS
Commentary On 6889's Past Performance
6889's trailing twelve-month earnings (from 31 March 2019) of JP¥13b has jumped 16% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -8.6%, indicating the rate at which 6889 is growing has accelerated. What's the driver of this growth? Let's take a look at whether it is merely attributable to an industry uplift, or if DYNAM JAPAN HOLDINGS has seen some company-specific growth.
In terms of returns from investment, DYNAM JAPAN HOLDINGS has fallen short of achieving a 20% return on equity (ROE), recording 8.9% instead. However, its return on assets (ROA) of 6.2% exceeds the HK Hospitality industry of 4.5%, indicating DYNAM JAPAN HOLDINGS has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for DYNAM JAPAN HOLDINGS’s debt level, has increased over the past 3 years from 11% to 13%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 3.9% to 2.3% over the past 5 years.
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 period. I suggest you continue to research DYNAM JAPAN HOLDINGS to get a better picture of the stock by looking at:
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Financial Health: Are 6889’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 6889 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 6889 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.