Yahoo Finance Interested In MNF Group Limited (ASX:MNF)? Here’s What Its Recent Performance Looks Like
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on MNF Group Limited (ASX:MNF) useful as an attempt to give more color around how MNF Group is currently performing. View out our latest analysis for MNF Group
Did MNF’s recent earnings growth beat the long-term trend and the industry?
MNF’s trailing twelve-month earnings (from 31 December 2017) of AU$13.26m has jumped 34.66% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 27.38%, indicating the rate at which MNF is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is solely a result of an industry uplift, or if MNF Group has seen some company-specific growth.
The rise in earnings seems to be supported by a strong top-line increase overtaking its growth rate of expenses. Though this resulted in a margin contraction, it has made MNF Group more profitable. Scanning growth from a sector-level, the Australian telecom industry has been growing, albeit, at a muted single-digit rate of 5.64% over the prior twelve months, and a substantial 11.39% over the previous five years. This means whatever tailwind the industry is deriving benefit from, MNF Group is capable of leveraging this to its advantage.
In terms of returns from investment, MNF Group has not invested its equity funds well, leading to a 18.41% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 10.30% exceeds the AU Telecom industry of 6.82%, indicating MNF Group has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for MNF Group’s debt level, has declined over the past 3 years from 53.93% to 23.06%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.034% to 13.97% over the past 5 years.
What does this mean?
While past data is useful, it 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 MNF Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for MNF’s future growth? Take a look at our free research report of analyst consensus for MNF’s outlook.
Financial Health: Is MNF’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 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.
