Assessing First Pacific Company Limited's (HKG:142) 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 142's recent performance announced on 31 December 2018 and evaluate these figures to its long-term trend and industry movements.
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Could 142 beat the long-term trend and outperform its industry?
142's trailing twelve-month earnings (from 31 December 2018) of US$132m has increased by 9.0% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -6.3%, indicating the rate at which 142 is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is solely a result of an industry uplift, or if First Pacific has seen some company-specific growth.
In terms of returns from investment, First Pacific has fallen short of achieving a 20% return on equity (ROE), recording 7.0% instead. Furthermore, its return on assets (ROA) of 2.3% is below the HK Diversified Financial industry of 2.7%, indicating First Pacific's are utilized less efficiently. However, its return on capital (ROC), which also accounts for First Pacific’s debt level, has increased over the past 3 years from 5.8% to 6.0%.
What does this mean?
First Pacific's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Recent positive growth isn't always indicative of a continued optimistic outlook. There could be factors that are affecting the entire industry thus the high industry growth rate over the same period of time. I recommend you continue to research First Pacific to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 142’s future growth? Take a look at our free research report of analyst consensus for 142’s outlook.
Financial Health: Are 142’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 2018. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.