SOLAR INDUSTRIES | Consistently Performing Businesses #3
Price vs Fundamentals over the last 20 Quarters
In this series of consistently performing businesses, we will look at the key fundamental statistics of SOLAR INDUSTRIES and how it has changed over the last 20 Quarters.
Now, why do we do this? Here is a take from some of the greatest investors.
"Over the long term, it's hard for a stock to earn a much better return than the business which underlies it earns." - Charlie Munger
"The best companies tend to increase their earnings over time, and the stock prices eventually follow." - William J. O'Neil
"I think you have to learn that there's a company behind every stock and that there's only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies."- Peter Lynch
Key Fundamental Statistics include:
Revenue TTM: It stands for "Revenue Trailing Twelve Months." It's a metric used to analyze a company's performance by calculating the total revenue generated over the preceding twelve months. We use it to remove any quarterly/semi-annual seasonalities associated with the business.
Operating Profit TTM: Again it is the sum of operating profit generated over the previous 12 months.
Operating Profit Margin (OPM)% = Operating Profit/Revenue expressed as %
ROIC%: ROIC stands for "Return on Invested Capital”. ROIC indicates how well a company is utilising its invested capital to generate profits.
ROIC = Net Operating Profit After Tax (NOPAT) / Invested Capital
If a company can increase its revenues and profits over time maintaining its operating margin and return on capital, it is indicative of a good past performance and a stable footing.
Detailed Fundamentals Report
Please find below a 60-page detailed fundamental statistics report on Solar Industries as of 10 Jan 2024.
Report Link - Solar Industries 10 Jan 2024
This report is available in Finvezto Toolkit which is part of our Premium Plan. Check out details about our Premium Plan here. The report covers the following aspects:
Quality Check
Safety Check
Valuation Check
Red Flags Check
Intrinsic Value Compounding Analysis
Earnings Retention Test
Du Pont Analysis
Common Size P&L and Balance Sheet
And Much More…
Points to Remember
There are 2 parts to Fundamental Analysis. How the company has executed in the Past (Quantitative Analysis) and how well it is placed for the Future (Qualitative Analysis). When we look at the data points as presented in the chart above, we mostly see the past and recent performances. It is like a rear-view mirror. It is not indicative of future performance.
One needs to keep track of the company’s performance periodically and keep updating the above chart.
We will be adding the list of consistently performing businesses periodically in Finvezto Compass. Please subscribe to our newsletter to get it right into your inbox.
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