Yahoo Finance Want To Invest In Tootsie Roll Industries, Inc. (NYSE:TR)? Here's How It Performed Lately
Today I will examine Tootsie Roll Industries, Inc.'s (NYSE:TR) latest earnings update (30 September 2019) and compare these figures against its performance over the past couple of years, in addition to how the rest of TR's industry performed. As a long-term investor, I find it useful to analyze the company's trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time.
Check out our latest analysis for Tootsie Roll Industries
Was TR's recent earnings decline indicative of a tough track record?
TR's trailing twelve-month earnings (from 30 September 2019) of US$63m has declined by -18% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 0.6%, indicating the rate at which TR is growing has slowed down. Why could this be happening? Let's examine what's going on with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, Tootsie Roll Industries has fallen short of achieving a 20% return on equity (ROE), recording 8.2% instead. Furthermore, its return on assets (ROA) of 5.9% is below the US Food industry of 6.0%, indicating Tootsie Roll Industries's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Tootsie Roll Industries’s debt level, has declined over the past 3 years from 11% to 8.7%.
What does this mean?
Tootsie Roll Industries's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. In some cases, companies that face an extended period of reduction in earnings are undergoing some sort of reinvestment phase However, if the whole industry is struggling to grow over time, it may be a sign of a structural change, which makes Tootsie Roll Industries and its peers a higher risk investment. You should continue to research Tootsie Roll Industries to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for TR’s future growth? Take a look at our free research report of analyst consensus for TR’s outlook.
Financial Health: Are TR’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 September 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
