When Hanwell Holdings Limited’s (SGX:DM0) announced its latest earnings (31 December 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Hanwell Holdings’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not DM0 actually performed well. Below is a quick commentary on how I see DM0 has performed.
Did DM0’s recent earnings growth beat the long-term trend and the industry?
DM0’s trailing twelve-month earnings (from 31 December 2018) of S$13m has jumped 21% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 22%, indicating the rate at which DM0 is growing has slowed down. Why could this be happening? Well, let’s examine what’s transpiring with margins and whether the entire industry is feeling the heat.
In terms of returns from investment, Hanwell Holdings has fallen short of achieving a 20% return on equity (ROE), recording 6.4% instead. Furthermore, its return on assets (ROA) of 2.2% is below the SG Food industry of 4.8%, indicating Hanwell Holdings’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Hanwell Holdings’s debt level, has increased over the past 3 years from 4.2% to 6.9%.
What does this mean?
Though Hanwell Holdings’s past data is helpful, it is only one aspect of my investment thesis. While Hanwell Holdings has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research Hanwell Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for DM0’s future growth? Take a look at our free research report of analyst consensus for DM0’s outlook.
- Financial Health: Are DM0’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 2018. This may not be consistent with full year annual report figures.
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