Measuring Thomson Medical Group Limited’s (SGX:A50) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess A50’s recent performance announced on 31 August 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Thomson Medical Group
Did A50 beat its long-term earnings growth trend and its industry?
For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This blend allows me to examine different stocks in a uniform manner using the most relevant data points. For Thomson Medical Group, its latest earnings (trailing twelve month) is S$32.80M, which, relative to the previous year’s level, has increased by 22.96%. Given that these figures are relatively myopic, I’ve estimated an annualized five-year figure for A50’s earnings, which stands at S$28.06M This means generally, Thomson Medical Group has been able to consistently grow its net income over the past few years as well.
What’s the driver of this growth? Let’s see if it is solely a result of an industry uplift, or if Thomson Medical Group has experienced some company-specific growth. In the last couple of years, Thomson Medical Group expanded its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Eyeballing growth from a sector-level, the SG healthcare industry has been relatively flat in terms of earnings growth over the past few years. This suggests that whatever recent headwind the industry is experiencing, the impact on Thomson Medical Group has been softer relative to its peers.
What does this mean?
Though Thomson Medical Group’s past data is helpful, it is only one aspect of my investment thesis. While Thomson Medical Group 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 Thomson Medical Group to get a more holistic view of the stock by looking at:
- Financial Health: Is A50’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.
- Valuation: What is A50 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether A50 is currently mispriced by the market.
- 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 August 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.