Measuring Ossen Innovation Co Ltd’s (NASDAQ:OSN) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess OSN’s recent performance announced on 30 June 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Ossen Innovation
Commentary On OSN’s Past Performance
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This allows me to assess different stocks on a similar basis, using new information. “For Ossen Innovation, its “, most recent earnings is $5.3M, which, in comparison to the previous year’s level, has increased by 17.56%. Since these figures may be relatively myopic, I’ve determined an annualized five-year value for OSN’s net income, which stands at $6.1M. This shows that, although earnings growth from last year was positive, over the longer term, Ossen Innovation’s earnings have been declining on average.
What could be happening here? Well, let’s take a look at what’s transpiring with margins and whether the entire industry is experiencing the hit as well. Revenue growth in the past couple of years, has been positive, nevertheless earnings growth has been deteriorating. This suggest that Ossen Innovation has been ramping up expenses, which is harming margins and earnings, and is not a sustainable practice. Eyeballing growth from a sector-level, the US metals and mining industry has been growing its average earnings by double-digit 36.16% in the prior twelve months, and a flatter -0.60% over the past couple of years. This shows that, in the recent industry expansion, Ossen Innovation has not been able to leverage it as much as its industry peers.
What does this mean?
Ossen Innovation’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be factors that are impacting the entire industry hence the high industry growth rate over the same time period. You should continue to research Ossen Innovation to get a more holistic view of the stock by looking at:
1. Financial Health: Is OSN’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.
2. Valuation: What is OSN 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 OSN is currently mispriced by the market.
3. 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 last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. 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.