data note – Antochi http://antochi.ro/ Sun, 20 Mar 2022 04:06:03 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://antochi.ro/wp-content/uploads/2021/07/icon-1-150x150.png data note – Antochi http://antochi.ro/ 32 32 Woolworths Group Limited (ASX:WOW) On an uptrend: could fundamentals be driving the stock? https://antochi.ro/woolworths-group-limited-asxwow-on-an-uptrend-could-fundamentals-be-driving-the-stock/ Sat, 19 Mar 2022 22:53:29 +0000 https://antochi.ro/woolworths-group-limited-asxwow-on-an-uptrend-could-fundamentals-be-driving-the-stock/ Shares of Woolworths Group (ASX:WOW) are up 4.6% over the past month. We wonder if and what role company finances play in this price change, as a company’s long-term fundamentals usually dictate market outcomes. In particular, we’ll be paying attention to Woolworths Group’s ROE today. Return on Equity or ROE is a test of how […]]]>

Shares of Woolworths Group (ASX:WOW) are up 4.6% over the past month. We wonder if and what role company finances play in this price change, as a company’s long-term fundamentals usually dictate market outcomes. In particular, we’ll be paying attention to Woolworths Group’s ROE today.

Return on Equity or ROE is a test of how effectively a company increases its value and manages investors’ money. In other words, it is a profitability ratio that measures the rate of return on capital contributed by the company’s shareholders.

Check out our latest analysis for Woolworths Group

How do you calculate return on equity?

the ROE formula East:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the formula above, the ROE for Woolworths Group is:

25% = AU$1.4 billion ÷ AU$5.7 billion (based on trailing 12 months to January 2022).

The “yield” is the profit of the last twelve months. Another way to think about this is that for every 1 Australian dollar of equity, the company was able to make a profit of 0.25 Australian dollars.

What is the relationship between ROE and earnings growth?

So far we have learned that ROE is a measure of a company’s profitability. Depending on how much of those earnings the company reinvests or “keeps”, and how efficiently it does so, we are then able to gauge a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and better earnings retention are generally the ones with a higher growth rate compared to companies that don’t. same characteristics.

Woolworths Group profit growth and 25% ROE

For starters, Woolworths Group has a pretty high ROE, which is interesting. Additionally, a comparison to the industry average ROE of 22% also paints a good picture of the company’s ROE. However, when you compare Woolworths Group’s high ROE with its rather stable earnings, you wonder what is causing the stunted growth? We believe there could be other factors at play here that limit the growth of the business. For example, the company pays a large portion of its profits in the form of dividends or faces competitive pressures.

From the 0.6% decline reported by the industry over the same period, we infer that the Woolworths Group and its industry are both contracting at a similar pace.

ASX: WOW Past Earnings Growth March 19, 2022

The basis for attaching value to a company is, to a large extent, linked to the growth of its profits. The investor should try to establish whether the expected growth or decline in earnings, as the case may be, is taken into account. By doing so, he will get an idea if the title is heading for clear blue waters or if swampy waters await. What is WOW worth today? The intrinsic value infographic in our free research report helps visualize if WOW is currently being mispriced by the market.

Does Woolworths Group use its retained earnings effectively?

With a high three-year median payout ratio of 89% (implying that the company retains only 11% of its revenue) from its business to reinvest in its business), most of Woolworths Group’s profits are returned to shareholders. , which explains the lack of revenue growth.

Additionally, Woolworths Group has paid dividends over a period of at least ten years, meaning the company’s management is committed to paying dividends even if it means little or no earnings growth. Based on the latest analyst estimates, we found that the company’s future payout ratio over the next three years is expected to remain stable at 73%. As a result, the company’s future ROE is also not expected to change much, with analysts predicting an ROE of 26%.

Summary

Overall, we believe Woolworths Group has some positive attributes. However, we are disappointed to see a lack of earnings growth, even despite high ROE. Keep in mind that the company reinvests a small portion of its profits, which means that investors do not reap the benefits of the high rate of return. Additionally, after studying current analyst estimates, we have found that the company’s earnings are expected to continue to decline in the future. To learn more about the latest analyst forecasts for the company, check out this analyst forecast visualization for the company.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Should we be delighted with YH Dimri Construction & Development Ltd’s 15% ROE? https://antochi.ro/should-we-be-delighted-with-yh-dimri-construction-development-ltds-15-roe/ Thu, 17 Mar 2022 04:16:54 +0000 https://antochi.ro/should-we-be-delighted-with-yh-dimri-construction-development-ltds-15-roe/ While some investors are already familiar with financial metrics (hat trick), this article is for those who want to learn more about return on equity (ROE) and why it matters. Learning by doing, we will look at ROE to better understand YH Dimri Construction & Development Ltd (TLV:DIMRI). Return on equity or ROE is an […]]]>

While some investors are already familiar with financial metrics (hat trick), this article is for those who want to learn more about return on equity (ROE) and why it matters. Learning by doing, we will look at ROE to better understand YH Dimri Construction & Development Ltd (TLV:DIMRI).

Return on equity or ROE is an important factor for a shareholder to consider as it tells them how much of their capital is being reinvested. In other words, it reveals the company’s success in turning shareholders’ investments into profits.

Check out our latest analysis for YH Dimri Construction & Development

How to calculate return on equity?

the return on equity formula East:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the above formula, the ROE for YH Dimri Construction & Development is:

15% = ₪216 million ÷ ₪1.4 billion (based on the last twelve months to September 2021).

The “yield” is the amount earned after tax over the last twelve months. One way to conceptualize this is that for every ₪1 of share capital it has, the company has made a profit of 0.15₪.

Does YH Dimri Construction & Development have a good return on equity?

By comparing a company’s ROE with the average for its industry, we can get a quick measure of its quality. It is important to note that this measure is far from perfect, as companies differ significantly within the same industry classification. Fortunately, YH Dimri Construction & Development has an ROE above the average (12%) of the real estate sector.

TASE:DIMRI Return on Equity March 17, 2022

It’s a good sign. Keep in mind that a high ROE does not always mean superior financial performance. In addition to changes in net income, a high ROE can also be the result of high debt to equity, which indicates risk.

What is the impact of debt on return on equity?

Virtually all businesses need money to invest in the business, to increase their profits. The money for the investment can come from the previous year’s earnings (retained earnings), from issuing new shares or from borrowing. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt necessary for growth will boost returns, but will not impact equity. In this way, the use of debt will increase ROE, even though the core economics of the business remains the same.

YH Dimri Construction & Development’s debt and its ROE of 15%

YH Dimri Construction & Development uses a high amount of debt to increase returns. Its debt to equity ratio is 1.66. While its ROE is respectable, it’s worth bearing in mind that there’s usually a limit to the amount of debt a company can use. Investors need to think carefully about how a company would perform if it weren’t able to borrow so easily, as credit markets change over time.

Summary

Return on equity is useful for comparing the quality of different companies. Companies that can earn high returns on equity without too much debt are generally of good quality. All things being equal, a higher ROE is better.

But when a company is of high quality, the market often gives it a price that reflects that. It is important to consider other factors, such as future earnings growth and the amount of investment needed in the future. So I think it’s worth checking it out free this detailed graph past profits, revenue and cash flow.

Sure YH Dimri Construction & Development may not be the best stock to buy. So you might want to see this free collection of other companies that have high ROE and low debt.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Tracsis plc (LON:TRCS) is doing well but fundamentals look mixed: is there a clear direction for the stock? https://antochi.ro/tracsis-plc-lontrcs-is-doing-well-but-fundamentals-look-mixed-is-there-a-clear-direction-for-the-stock/ Tue, 15 Mar 2022 07:55:36 +0000 https://antochi.ro/tracsis-plc-lontrcs-is-doing-well-but-fundamentals-look-mixed-is-there-a-clear-direction-for-the-stock/ Most readers already know that Tracsis (LON:TRCS) stock is up a significant 12% over the past week. However, we decided to pay attention to the fundamentals of the company which do not seem to give a clear indication of the financial health of the company. In this article, we decided to focus on the ROE […]]]>

Most readers already know that Tracsis (LON:TRCS) stock is up a significant 12% over the past week. However, we decided to pay attention to the fundamentals of the company which do not seem to give a clear indication of the financial health of the company. In this article, we decided to focus on the ROE of Tracsis.

ROE or return on equity is a useful tool for evaluating how effectively a company can generate returns on the investment it has received from its shareholders. In other words, it reveals the company’s success in turning shareholders’ investments into profits.

Check out our latest analysis for Tracsis

How do you calculate return on equity?

the return on equity formula East:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the formula above, the ROE for Tracsis is:

4.2% = £2.4m ÷ £57m (based on trailing 12 months to July 2021).

“Yield” is the income the business has earned over the past year. Thus, this means that for every £1 of investment by its shareholder, the company generates a profit of £0.04.

What does ROE have to do with earnings growth?

We have already established that ROE serves as an effective profit-generating indicator for a company’s future earnings. Depending on how much of those earnings the company reinvests or “keeps”, and how efficiently it does so, we are then able to gauge a company’s earnings growth potential. Generally speaking, all things being equal, companies with high return on equity and earnings retention have a higher growth rate than companies that do not share these attributes.

Tracsis earnings growth and ROE of 4.2%

When you first look at it, Tracsis’ ROE doesn’t look that appealing. A quick closer look shows that the company’s ROE also doesn’t compare favorably to the industry average of 9.0%. Given the circumstances, the significant decline in net income of 7.6% experienced by Tracsis over the past five years is not surprising. We believe there could also be other aspects that negatively influence the company’s earnings outlook. For example, the company has a very high payout ratio or faces competitive pressures.

So, as a next step, we benchmarked Tracsis’ performance against the industry and were disappointed to find that while the company was cutting profits, the industry was increasing profits at a rate of 13% in during the same period.

OBJECTIVE: TRCS Past Earnings Growth March 15, 2022

Earnings growth is an important factor in stock valuation. The investor should try to establish whether the expected growth or decline in earnings, as the case may be, is taken into account. By doing so, he will get an idea if the title is heading for clear blue waters or if swampy waters await. A good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings outlook. So, you might want to check if Tracsis is trading on a high P/E or a low P/E, relative to its industry.

Does Tracsis effectively reinvest its profits?

Although the company has paid a portion of its dividend in the past, it currently does not pay any dividend. This implies that potentially all of its profits are reinvested in the business.

Conclusion

All in all, we’re a bit ambivalent about Tracsis’ performance. Although the company has a high earnings retention rate, its low rate of return is likely hampering its earnings growth. That said, looking at current analyst estimates, we found that the company’s earnings growth rate should see a huge improvement. To learn more about the latest analyst forecasts for the company, check out this analyst forecast visualization for the company.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Here’s why Banka BioLoo (NSE:BANKA) has significant debt https://antochi.ro/heres-why-banka-bioloo-nsebanka-has-significant-debt/ Wed, 09 Mar 2022 00:40:12 +0000 https://antochi.ro/heres-why-banka-bioloo-nsebanka-has-significant-debt/ David Iben said it well when he said: “Volatility is not a risk that interests us. What matters to us is to avoid the permanent loss of capital. It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. Mostly, Banka BioLoo Limited (NSE:BANKA) […]]]>

David Iben said it well when he said: “Volatility is not a risk that interests us. What matters to us is to avoid the permanent loss of capital. It’s natural to consider a company’s balance sheet when looking at its riskiness, as debt is often involved when a company fails. Mostly, Banka BioLoo Limited (NSE:BANKA) is in debt. But should shareholders worry about its use of debt?

When is debt a problem?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. Of course, debt can be an important tool in businesses, especially capital-intensive businesses. The first thing to do when considering how much debt a business has is to look at its cash and debt together.

See our latest analysis for Banka BioLoo

What is Banka BioLoo’s net debt?

The image below, which you can click on for more details, shows that as of September 2021, Banka BioLoo had a debt of ₹121.3m, up from ₹105.8m in a year. However, he also had ₹37.1 million in cash, and hence his net debt is ₹84.2 million.

NSEI: BANKA Debt to Equity History March 9, 2022

A look at the responsibilities of Banka BioLoo

According to the latest published balance sheet, Banka BioLoo had liabilities of ₹115.2 million due within 12 months and liabilities of ₹53.8 million due beyond 12 months. In return, he had ₹37.1 million in cash and ₹134.5 million in receivables due within 12 months. These liquid assets therefore roughly correspond to the total liabilities.

This situation indicates that Banka BioLoo’s balance sheet looks quite strong, as its total liabilities are roughly equal to its cash. So while it’s hard to imagine the ₹646.2m company struggling to raise cash, we still think it’s worth keeping an eye on its balance sheet.

In order to assess a company’s debt relative to its earnings, we calculate its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and its earnings before interest and taxes (EBIT) divided by its expenses. interest (its interest coverage). In this way, we consider both the absolute amount of debt, as well as the interest rates paid on it.

Banka BioLoo has net debt worth 2.1x EBITDA, which isn’t too much, but its interest coverage seems a little low, with EBIT at just 2.7x interest expense. interests. While that doesn’t worry us too much, it does suggest that interest payments are a bit of a burden. Importantly, Banka BioLoo’s EBIT has fallen by 31% over the last twelve months. If this earnings trend continues, paying off debt will be about as easy as herding cats on a roller coaster. There is no doubt that we learn the most about debt from the balance sheet. But you can’t look at debt in total isolation; since Banka BioLoo will need income to repay this debt. So, if you want to know more about its earnings, it might be worth checking out this graph of its long-term trend.

Finally, a business needs free cash flow to pay off its debts; book profits are not enough. We therefore always check how much of this EBIT is converted into free cash flow. Over the past three years, Banka BioLoo has actually had a cash outflow, overall. Debt is generally more expensive and almost always riskier in the hands of a company with negative free cash flow. Shareholders should hope for an improvement.

Our point of view

We would go so far as to say that Banka BioLoo’s EBIT growth rate is disappointing. But on the positive side, his level of total liabilities is a good sign and makes us more optimistic. Once we consider all of the above factors, together, it seems to us that Banka BioLoo’s debt makes it a bit risky. This isn’t necessarily a bad thing, but we would generally feel more comfortable with less leverage. There is no doubt that we learn the most about debt from the balance sheet. However, not all investment risks reside on the balance sheet, far from it. For example, we have identified 4 warning signs for Banka BioLoo (1 should not be ignored) which you should be aware of.

If you are interested in investing in companies that can generate profits without the burden of debt, then check out this free list of growing companies that have net cash on the balance sheet.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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These 4 measures indicate that Endesa (BME:ELE) is using debt extensively https://antochi.ro/these-4-measures-indicate-that-endesa-bmeele-is-using-debt-extensively/ Mon, 07 Mar 2022 04:49:05 +0000 https://antochi.ro/these-4-measures-indicate-that-endesa-bmeele-is-using-debt-extensively/ Legendary fund manager Li Lu (whom Charlie Munger once backed) once said, “The greatest risk in investing is not price volatility, but whether you will suffer a permanent loss of capital. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing […]]]>

Legendary fund manager Li Lu (whom Charlie Munger once backed) once said, “The greatest risk in investing is not price volatility, but whether you will suffer a permanent loss of capital. So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. Like many other companies Endesa, S.A. (BME:ELE) uses debt. But the more important question is: what risk does this debt create?

Why is debt risky?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company cannot meet its legal debt repayment obligations, shareholders could walk away with nothing. However, a more common (but still painful) scenario is that it has to raise new equity at a low price, thereby permanently diluting shareholders. Of course, many companies use debt to finance their growth, without any negative consequences. When we think about a company’s use of debt, we first look at cash and debt together.

See our latest analysis for Endesa

What is Endesa’s net debt?

As you can see below, at the end of December 2021, Endesa had 9.45 billion euros in debt, compared to 6.51 billion euros a year ago. Click on the image for more details. However, he also had €1.59 billion in cash, so his net debt is €7.86 billion.

BME:ELE Debt to Equity History March 7, 2022

How healthy is Endesa’s balance sheet?

According to the last published balance sheet, Endesa had liabilities of 15.8 billion euros due within 12 months and liabilities of 18.6 billion euros due beyond 12 months. In return, it had 1.59 billion euros in cash and 6.32 billion euros in receivables due within 12 months. Thus, its liabilities total 26.5 billion euros more than the combination of its cash and short-term receivables.

When you consider that this shortfall exceeds the company’s massive $18.9 billion market capitalization, you might well be inclined to take a close look at the balance sheet. In the scenario where the company were to quickly clean up its balance sheet, it seems likely that shareholders would suffer significant dilution.

In order to assess a company’s debt relative to its earnings, we calculate its net debt divided by its earnings before interest, taxes, depreciation and amortization (EBITDA) and its earnings before interest and taxes (EBIT) divided by its expenses. interest (its interest coverage). Thus, we consider debt to earnings with and without amortization and depreciation expense.

Endesa’s net debt to EBITDA ratio of around 2.1 suggests only moderate use of debt. And its towering EBIT of 158 times its interest expense means that the debt burden is as light as a peacock feather. Unfortunately, Endesa’s EBIT has fallen by 16% over the past four quarters. If that kind of decline isn’t stopped, then managing his debt will be harder than selling broccoli-flavored ice cream for a bounty. When analyzing debt levels, the balance sheet is the obvious starting point. But it is future earnings, more than anything, that will determine Endesa’s ability to maintain a healthy balance sheet in the future. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Finally, a business needs free cash flow to pay off its debts; book profits are not enough. So the logical step is to look at what proportion of that EBIT is actual free cash flow. Over the past three years, Endesa has recorded a free cash flow of 44% of its EBIT, which is lower than expected. It’s not great when it comes to paying off debt.

Our point of view

At first glance, Endesa’s EBIT growth rate left us hesitant about the stock, and its level of total liabilities was no more appealing than the single empty restaurant on the busiest night of the year. But at least it’s decent enough to cover its interest costs with its EBIT; it’s encouraging. It should also be noted that companies in the electric utility sector like Endesa generally use debt without problems. Looking at the bigger picture, it seems clear to us that Endesa’s use of debt creates risks for the business. If all goes well, it can pay off, but the downside of this debt is a greater risk of permanent losses. There is no doubt that we learn the most about debt from the balance sheet. But at the end of the day, every business can contain risks that exist outside of the balance sheet. We have identified 3 warning signs with Endesa, and understanding them should be part of your investment process.

If, after all that, you’re more interested in a fast-growing company with a strong balance sheet, check out our list of cash-neutral growth stocks right away.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Is the recent stock performance of Teledyne Technologies Incorporated (NYSE:TDY) influenced in any way by its financials? https://antochi.ro/is-the-recent-stock-performance-of-teledyne-technologies-incorporated-nysetdy-influenced-in-any-way-by-its-financials/ Sun, 06 Mar 2022 14:32:12 +0000 https://antochi.ro/is-the-recent-stock-performance-of-teledyne-technologies-incorporated-nysetdy-influenced-in-any-way-by-its-financials/ Most readers will already know that Teledyne Technologies (NYSE:TDY) stock is up 8.2% over the past three months. Since stock prices are generally aligned with a company’s financial performance over the long term, we decided to investigate whether the company’s decent financials had a role to play in the recent price movement. In this article, […]]]>

Most readers will already know that Teledyne Technologies (NYSE:TDY) stock is up 8.2% over the past three months. Since stock prices are generally aligned with a company’s financial performance over the long term, we decided to investigate whether the company’s decent financials had a role to play in the recent price movement. In this article, we decided to focus on the ROE of Teledyne Technologies.

ROE or return on equity is a useful tool for evaluating how effectively a company can generate returns on the investment it has received from its shareholders. In short, ROE shows the profit that each dollar generates in relation to the investments of its shareholders.

See our latest analysis for Teledyne Technologies

How do you calculate return on equity?

ROE can be calculated using the formula:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the formula above, the ROE of Teledyne Technologies is:

5.8% = $445 million ÷ $7.6 billion (based on trailing 12 months to January 2022).

“Yield” is the income the business has earned over the past year. One way to conceptualize this is that for every $1 of share capital it has, the firm has made a profit of $0.06.

What is the relationship between ROE and earnings growth?

So far we have learned that ROE is a measure of a company’s profitability. We now need to assess how much profit the company is reinvesting or “retaining” for future growth, which then gives us an idea of ​​the company’s growth potential. Assuming everything else remains unchanged, the higher the ROE and earnings retention, the higher a company’s growth rate compared to companies that don’t necessarily exhibit these characteristics.

Teledyne Technologies earnings growth and ROE of 5.8%

At first glance, Teledyne Technologies’ ROE doesn’t look that appealing. We then compared the company’s ROE to the entire industry and were disappointed to see that the ROE is below the industry average of 14%. However, we can see that Teledyne Technologies has experienced modest net profit growth of 16% over the past five years. We believe there could be other factors at play here. For example, the business has a low payout ratio or is efficiently managed.

We then performed a comparison of Teledyne Technologies’ net income growth with the industry, which revealed that the company’s growth is similar to the industry average growth of 16% over the same period.

NYSE: TDY Past Earnings Growth March 6, 2022

Earnings growth is an important factor in stock valuation. What investors then need to determine is whether the expected earnings growth, or lack thereof, is already priced into the stock price. By doing so, they will get an idea if the stock is headed for clear blue waters or if swampy waters are waiting. What is TDY worth today? The intrinsic value infographic in our free research report helps visualize whether TDY is currently being mispriced by the market.

Does Teledyne Technologies use its profits effectively?

Teledyne Technologies currently pays no dividends, which essentially means that it has reinvested all of its earnings back into the company. This certainly contributes to the decent number of earnings growth we discussed above.

Conclusion

All in all, it seems that Teledyne Technologies has some positive aspects of its business. With a high reinvestment rate, albeit at a low ROE, the company managed to see considerable growth in earnings. That said, the latest analyst forecasts show that the company will continue to see earnings expansion. Are these analyst expectations based on general industry expectations or company fundamentals? Click here to access our analyst forecast page for the company.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Polwax SA (WSE:PWX) shares are recovering but financials seem ambiguous: will the momentum continue? https://antochi.ro/polwax-sa-wsepwx-shares-are-recovering-but-financials-seem-ambiguous-will-the-momentum-continue/ Fri, 04 Mar 2022 06:57:20 +0000 https://antochi.ro/polwax-sa-wsepwx-shares-are-recovering-but-financials-seem-ambiguous-will-the-momentum-continue/ Polwax Inc (WSE:PWX) has had a strong run in the stock market with a significant 11% rise in its stock over the past week. However, we decided to pay attention to the fundamentals of the company which do not seem to give a clear indication of the financial health of the company. Specifically, we decided […]]]>

Polwax Inc (WSE:PWX) has had a strong run in the stock market with a significant 11% rise in its stock over the past week. However, we decided to pay attention to the fundamentals of the company which do not seem to give a clear indication of the financial health of the company. Specifically, we decided to study the ROE of Polwax in this article.

Return on equity or ROE is an important factor for a shareholder to consider as it tells them how much of their capital is being reinvested. In simple terms, it is used to assess the profitability of a company in relation to its equity.

See our latest analysis for Polwax

How to calculate return on equity?

the ROE formula East:

Return on equity = Net income (from continuing operations) ÷ Equity

So, based on the above formula, the ROE for Polwax is:

6.3% = 5.6 million zł ÷ 89 million zł (based on the last twelve months until September 2021).

“Yield” is the income the business has earned over the past year. Another way to think about this is that for every 1 PLN worth of equity, the company was able to make a profit of 0.06 PLN.

Why is ROE important for earnings growth?

We have already established that ROE serves as an effective earnings-generating indicator for a company’s future earnings. We now need to assess how much profit the company is reinvesting or “retaining” for future growth, which then gives us an idea of ​​the company’s growth potential. Generally speaking, all things being equal, companies with high return on equity and earnings retention have a higher growth rate than companies that do not share these attributes.

Polwax earnings growth and ROE of 6.3%

When you first look at it, Polwax’s ROE doesn’t look so appealing. Then, compared to the industry average ROE of 10%, the company’s ROE leaves us even less excited. For this reason, Polwax’s 44% drop in net income over five years is not surprising given its lower ROE. We believe there could be other factors at play here as well. For example, it is possible that the company has misallocated capital or that the company has a very high payout ratio.

However, when we compared Polwax’s growth with the industry, we found that although the company’s earnings declined, the industry saw earnings growth of 5.8% over the same period. period. It’s quite worrying.

WSE: PWX Past Earnings Growth March 4, 2022

Earnings growth is an important factor in stock valuation. What investors then need to determine is whether the expected earnings growth, or lack thereof, is already priced into the stock price. By doing so, they will get an idea if the stock is headed for clear blue waters or if swampy waters are waiting. Is Polwax correctly valued compared to other companies? These 3 assessment metrics might help you decide.

Does Polwax effectively reinvest its profits?

Polwax does not pay any dividends, which means that potentially all of its profits are reinvested in the company, which does not explain why the company’s profits have decreased if it retains all of its profits. So there could be other explanations for this. For example, the company’s business may deteriorate.

Conclusion

Overall, we feel that the performance shown by Polwax can lend itself to many interpretations. Although the company has a high earnings retention rate, its low rate of return is likely hampering its earnings growth. In conclusion, we would proceed with caution with this business and one way to do that would be to review the risk profile of the business. To know the 3 risks that we have identified for Polwax, visit our risk dashboard for free.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Is Strike Energy (ASX:STX) using too much debt? https://antochi.ro/is-strike-energy-asxstx-using-too-much-debt/ Thu, 03 Mar 2022 00:27:40 +0000 https://antochi.ro/is-strike-energy-asxstx-using-too-much-debt/ Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. […]]]>

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett said “volatility is far from synonymous with risk.” So it seems smart money knows that debt – which is usually involved in bankruptcies – is a very important factor when you’re assessing a company’s risk. Mostly, Limited strike energy (ASX:STX) is in debt. But the real question is whether this debt makes the business risky.

When is debt a problem?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. If things go really bad, lenders can take over the business. However, a more frequent (but still costly) event is when a company has to issue shares at bargain prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, the advantage of debt is that it often represents cheap capital, especially when it replaces dilution in a business with the ability to reinvest at high rates of return. When we think about a company’s use of debt, we first look at cash and debt together.

Check out our latest analysis for Strike Energy

What is Strike Energy’s debt?

You can click on the graph below for historical figures, but it shows that in December 2021 Strike Energy had debt of A$10.7 million, an increase from A$322,000, year-on-year . But on the other hand, he also has A$40.9 million in cash, resulting in a net cash position of A$30.2 million.

ASX: STX Debt to Equity History March 3, 2022

A look at Strike Energy passives

The latest balance sheet data shows that Strike Energy had liabilities of A$18.4 million due within one year, and liabilities of A$17.7 million falling due thereafter. In return for these obligations, it had cash of A$40.9 million and receivables valued at A$1.66 million due within 12 months. He can therefore boast of having 6.37 million Australian dollars of liquid assets more than total Passives.

Considering the size of Strike Energy, it appears its cash is well balanced against its total liabilities. So while it’s hard to imagine the A$607.5m company fighting for cash, we still think it’s worth keeping an eye on its balance sheet. Simply put, the fact that Strike Energy has more cash than debt is arguably a good indication that it can safely manage its debt. There is no doubt that we learn the most about debt from the balance sheet. But it is future earnings, more than anything, that will determine Strike Energy’s ability to maintain a healthy balance sheet in the future. So if you want to see what the professionals think, you might find this free analyst earnings forecast report interesting.

Given its lack of meaningful operating revenue, Strike Energy shareholders are no doubt hoping it can finance itself until it can sell fuels.

So how risky is Strike Energy?

By their very nature, companies that lose money are riskier than those with a long history of profitability. And we note that Strike Energy posted a loss in earnings before interest and taxes (EBIT) over the past year. Indeed, during this period, it burned A$41 million in cash and suffered a loss of A$16 million. But at least it has A$30.2m on the balance sheet to spend on near-term growth. Overall, its balance sheet doesn’t look too risky, at the moment, but we’re still cautious until we see positive free cash flow. The balance sheet is clearly the area to focus on when analyzing debt. However, not all investment risks reside on the balance sheet, far from it. For example, we found 5 warning signs for Strike Energy (3 are a bit of a concern!) that you should be aware of before investing here.

Of course, if you’re the type of investor who prefers to buy stocks without the burden of debt, then feel free to check out our exclusive list of cash-efficient growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Here’s why Dollar Industries (NSE:DOLLAR) can manage its debt responsibly https://antochi.ro/heres-why-dollar-industries-nsedollar-can-manage-its-debt-responsibly/ Tue, 01 Mar 2022 01:55:09 +0000 https://antochi.ro/heres-why-dollar-industries-nsedollar-can-manage-its-debt-responsibly/ Howard Marks said it well when he said that, rather than worrying about stock price volatility, “the possibility of permanent loss is the risk I worry about…and that every practical investor that I know is worried”. So it may be obvious that you need to take debt into account when thinking about the risk of […]]]>

Howard Marks said it well when he said that, rather than worrying about stock price volatility, “the possibility of permanent loss is the risk I worry about…and that every practical investor that I know is worried”. So it may be obvious that you need to take debt into account when thinking about the risk of a given stock, because too much debt can sink a business. We can see that Dollar Industries Limited (NSE:DOLLAR) uses debt in its business. But the real question is whether this debt makes the business risky.

When is debt a problem?

Debt is a tool to help businesses grow, but if a business is unable to repay its lenders, it exists at their mercy. In the worst case, a company can go bankrupt if it cannot pay its creditors. Although not too common, we often see companies in debt permanently diluting their shareholders because lenders force them to raise capital at a ridiculous price. Of course, debt can be an important tool in businesses, especially capital-intensive businesses. The first thing to do when considering how much debt a business has is to look at its cash and debt together.

See our latest analysis for Dollar Industries

What is Dollar Industries net debt?

You can click on the graph below for historical figures, but it shows that as of September 2021, Dollar Industries had debt of ₹1.69 billion, an increase from ₹1.29 billion, on a year. However, since he has a cash reserve of ₹86.7 million, his net debt is lower at around ₹1.60 billion.

NSEI:DOLLAR Debt to Equity Historical March 1, 2022

How strong is Dollar Industries’ balance sheet?

Zooming in on the latest balance sheet data, we can see that Dollar Industries had liabilities of ₹3.93 billion due within 12 months and liabilities of ₹81.3 million due beyond. In return, he had ₹86.7 million in cash and ₹3.79 billion in receivables due within 12 months. Thus, its liabilities total £133.2 million more than the combination of its cash and short-term receivables.

Considering the size of Dollar Industries, it looks like its cash is well balanced with its total liabilities. It is therefore highly unlikely that the ₹31.4bn company will run out of cash, but it is still worth keeping an eye on the balance sheet.

We use two main ratios to inform us about debt to earnings levels. The first is net debt divided by earnings before interest, taxes, depreciation and amortization (EBITDA), while the second is how often its earnings before interest and taxes (EBIT) covers its interest expense (or its interests, for short). Thus, we consider debt to earnings with and without amortization and depreciation expense.

Dollar Industries has a low net debt to EBITDA ratio of just 0.84. And its EBIT covers its interest charges 32.5 times. So we’re pretty relaxed about his super-conservative use of debt. On top of that, we are pleased to report that Dollar Industries increased its EBIT by 57%, reducing the specter of future debt repayments. There is no doubt that we learn the most about debt from the balance sheet. But you can’t look at debt in total isolation; since Dollar Industries will need revenue to repay this debt. So, when considering debt, it is definitely worth looking at the earnings trend. Click here for an interactive preview.

Finally, a business needs free cash flow to pay off its debts; book profits are not enough. We must therefore clearly examine whether this EBIT generates a corresponding free cash flow. Over the past three years, Dollar Industries has recorded free cash flow of 29% of its EBIT, which is lower than expected. This low cash conversion makes debt management more difficult.

Our point of view

The good news is that Dollar Industries’ demonstrated ability to cover interest costs with EBIT delights us like a fluffy puppy does a toddler. But, on a darker note, we are a bit concerned about its conversion of EBIT into free cash flow. Zooming out, Dollar Industries seems to be using debt quite sensibly; and that gets the green light from us. Although debt carries risks, when used wisely, it can also generate a higher return on equity. The balance sheet is clearly the area to focus on when analyzing debt. But at the end of the day, every business can contain risks that exist outside of the balance sheet. Be aware that Dollar Industries displays 2 warning signs in our investment analysis you should know…

Of course, if you’re the type of investor who prefers to buy stocks without the burden of debt, then feel free to check out our exclusive list of cash-efficient growth stocks today.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Is Virgin Galactic Holdings (NYSE:SPCE) a risky investment? https://antochi.ro/is-virgin-galactic-holdings-nysespce-a-risky-investment/ Sun, 27 Feb 2022 15:07:07 +0000 https://antochi.ro/is-virgin-galactic-holdings-nysespce-a-risky-investment/ Legendary fund manager Li Lu (whom Charlie Munger once backed) once said, “The greatest risk in investing is not price volatility, but whether you will suffer a permanent loss of capital. When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. We […]]]>

Legendary fund manager Li Lu (whom Charlie Munger once backed) once said, “The greatest risk in investing is not price volatility, but whether you will suffer a permanent loss of capital. When we think of a company’s risk, we always like to look at its use of debt, because over-indebtedness can lead to ruin. We can see that Virgin Galactic Holdings, Inc. (NYSE: SPCE) uses debt in its operations. But should shareholders worry about its use of debt?

When is debt dangerous?

Debt and other liabilities become risky for a business when it cannot easily meet those obligations, either with free cash flow or by raising capital at an attractive price. An integral part of capitalism is the process of “creative destruction” where bankrupt companies are mercilessly liquidated by their bankers. However, a more common (but still painful) scenario is that it has to raise new equity at a low price, thereby permanently diluting shareholders. Of course, debt can be an important tool in businesses, especially capital-intensive businesses. The first step when considering a company’s debt levels is to consider its cash and debt together.

Check out our latest analysis for Virgin Galactic Holdings

How much debt does Virgin Galactic Holdings have?

The image below, which you can click on for more details, shows that as of December 2021, Virgin Galactic Holdings had $2.64 million in debt, up from $620,000 in one year. However, his balance sheet shows that he holds $603.9 million in cash, so he actually has $601.3 million in net cash.

NYSE:SPCE Debt to Equity February 27, 2022

How strong is Virgin Galactic Holdings’ balance sheet?

According to the last published balance sheet, Virgin Galactic Holdings had liabilities of $131.5 million due within 12 months and liabilities of $43.0 million due beyond 12 months. In compensation for these obligations, it had cash of 603.9 million US dollars as well as receivables valued at 829.0 thousand US dollars maturing within 12 months. He can therefore boast of having $430.2 million in cash more than total Passives.

It’s good to see that Virgin Galactic Holdings has plenty of cash on its balance sheet, suggesting careful liability management. Given that he has easily sufficient short-term cash, we don’t think he will have any problems with his lenders. Simply put, the fact that Virgin Galactic Holdings has more cash than debt is arguably a good indication that it can safely manage its debt. The balance sheet is clearly the area to focus on when analyzing debt. But it is future earnings, more than anything, that will determine Virgin Galactic Holdings’ ability to maintain a healthy balance sheet in the future. So if you are focused on the future, you can check out this free report showing analyst earnings forecast.

Year-over-year, Virgin Galactic Holdings posted revenue of $3.3 million, a 1,283% gain, although it reported no earnings before interest and taxes. When it comes to revenue growth, it’s like winning the 3-point game!

So what is the risk of Virgin Galactic Holdings?

By their very nature, companies that lose money are riskier than those with a long history of profitability. And over the past year, Virgin Galactic Holdings has posted a loss in earnings before interest and taxes (EBIT), if truth be told. And during the same period, it recorded a negative free cash outflow of US$235 million and recorded a book loss of US$353 million. However, he has a net cash position of US$601.3 million, so he still has some time before he needs more capital. The good news for shareholders is that Virgin Galactic Holdings has skyrocketing revenue growth, so there’s a very good chance it can increase its free cash flow in the years to come. While unprofitable businesses can be risky, they can also grow strongly and quickly in those pre-profit years. The balance sheet is clearly the area to focus on when analyzing debt. However, not all investment risks reside on the balance sheet, far from it. These risks can be difficult to spot. Every business has them, and we’ve spotted 4 warning signs for Virgin Galactic Holdings you should know.

If you are interested in investing in companies that can generate profits without the burden of debt, then check out this free list of growing companies that have net cash on the balance sheet.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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