When Neways Electronics International NV. (ENXTAM:NEWAY) announced its most recent earnings (31 December 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Neways Electronics International 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 NEWAY has performed. See our latest analysis for Neways Electronics International

Commentary On NEWAY’s Past Performance

I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method allows me to examine different stocks on a more comparable basis, using the latest information. For Neways Electronics International, its latest earnings (trailing twelve month) is €9.90M, which compared to last year’s figure, has increased by a fairly soft 2.13%. Given that these values are relatively myopic, I have calculated an annualized five-year figure for NEWAY’s earnings, which stands at €4.83M This shows that, generally, Neways Electronics International has been able to steadily improve its profits over the last few years as well.

How has it been able to do this? Let’s take a look at if it is solely due to an industry uplift, or if Neways Electronics International has experienced some company-specific growth. Over the past couple of years, Neways Electronics International increased its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Viewing growth from a sector-level, the NL electronic industry has been growing its average earnings by double-digit 17.16% over the prior twelve months, and a less exciting 9.99% over the past five. This shows that any uplift the industry is deriving benefit from, Neways Electronics International has not been able to reap as much as its average peer.

What does this mean?

Though Neways Electronics International’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research Neways Electronics International to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is NEWAY’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.

• 2. 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.