Understanding Spindex Industries Limited's (SGX:564) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how Spindex Industries is doing by evaluating its latest earnings with its longer term trend as well as its industry peers' performance over the same period.
Did 564 beat its long-term earnings growth trend and its industry?
564's trailing twelve-month earnings (from 30 June 2019) of S$15m has increased by 9.1% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 8.4%, indicating the rate at which 564 is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is merely because of industry tailwinds, or if Spindex Industries has experienced some company-specific growth.
In terms of returns from investment, Spindex Industries has fallen short of achieving a 20% return on equity (ROE), recording 13% instead. However, its return on assets (ROA) of 9.5% exceeds the SG Machinery industry of 4.3%, indicating Spindex Industries has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Spindex Industries’s debt level, has declined over the past 3 years from 16% to 15%.
What does this mean?
Though Spindex Industries's past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Spindex Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Spindex Industries to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for 564’s future growth? Take a look at our free research report of analyst consensus for 564’s outlook.
- Financial Health: Are 564’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 June 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 firstname.lastname@example.org. 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.