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How Does Second Chance Properties Ltd's (SGX:528) Earnings Growth Stack Up Against Industry Performance?

Simply Wall St

Measuring Second Chance Properties Ltd's (SGX:528) 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 528's recent performance announced on 30 November 2019 and weigh these figures against its long-term trend and industry movements.

Check out our latest analysis for Second Chance Properties

How Well Did 528 Perform?

528's trailing twelve-month earnings (from 30 November 2019) of S$6.7m has jumped 13% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -17%, indicating the rate at which 528 is growing has accelerated. How has it been able to do this? Well, let’s take a look at if it is merely owing to industry tailwinds, or if Second Chance Properties has seen some company-specific growth.

SGX:528 Income Statement, March 2nd 2020

In terms of returns from investment, Second Chance Properties has fallen short of achieving a 20% return on equity (ROE), recording 2.5% instead. Furthermore, its return on assets (ROA) of 2.4% is below the SG Specialty Retail industry of 5.4%, indicating Second Chance Properties's are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Second Chance Properties’s debt level, has declined over the past 3 years from 4.2% to 3.7%.

What does this mean?

Second Chance Properties'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 influencing the entire industry hence the high industry growth rate over the same time period. I recommend you continue to research Second Chance Properties to get a better picture of the stock by looking at:

  1. Financial Health: Are 528’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 528 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 528 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 trailing twelve months from 30 November 2019. This may not be consistent with full year annual report figures.

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.

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. Thank you for reading.