Examining Hurco Companies Inc’s ( NASDAQ:HURC ) 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 HURC’s latest performance announced on 30 April 2018 and compare these figures to its longer term trend and industry movements. View out our latest analysis for Hurco Companies
How HURC fared against its long-term earnings performance and its industry
HURC’s trailing twelve-month earnings (from 30 April 2018) of US$17.17m has jumped 68.55% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 3.86%, indicating the rate at which HURC is growing has accelerated. How has it been able to do this? Let’s take a look at whether it is solely attributable to industry tailwinds, or if Hurco Companies has experienced some company-specific growth.
The hike in earnings seems to be supported by a robust top-line increase beating its growth rate of costs. Though this brought about a margin contraction, it has made Hurco Companies more profitable. Viewing growth from a sector-level, the US machinery industry has been growing its average earnings by double-digit 23.44% in the past twelve months, and a more muted 4.62% over the past five years. This suggests that whatever uplift the industry is deriving benefit from, Hurco Companies is able to leverage this to its advantage.
In terms of returns from investment, Hurco Companies has not invested its equity funds well, leading to a 8.14% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 5.65% is below the US Machinery industry of 5.76%, indicating Hurco Companies’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Hurco Companies’s debt level, has declined over the past 3 years from 13.98% to 12.25%.
What does this mean?
Hurco Companies’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. 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 Hurco Companies to get a more holistic view of the stock by looking at:
- Future Outlook : What are well-informed industry analysts predicting for HURC’s future growth? Take a look at our free research report of analyst consensus for HURC’s outlook.
- Financial Health : Is HURC’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 30 April 2018. 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.