For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on Sino-Global Shipping America Ltd (NASDAQ:SINO) useful as an attempt to give more color around how Sino-Global Shipping America is currently performing. Check out our latest analysis for Sino-Global Shipping America
Did SINO perform worse than its track record and industry?
SINO’s trailing twelve-month earnings (from 31 March 2018) of US$1.79m has declined by -38.68% compared to the previous year. Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 37.05%, indicating the rate at which SINO is growing has slowed down. Why could this be happening? Let’s examine what’s going on with margins and if the whole industry is experiencing the hit as well.
In the past couple of years, revenue growth has been lagging behind earnings, which suggests that Sino-Global Shipping America’s bottom line has been propelled by unmaintainable cost-cutting. Viewing growth from a sector-level, the US infrastructure industry has been growing its average earnings by double-digit 13.71% in the previous year, and a less exciting 8.78% over the past five. This means that any tailwind the industry is benefiting from, Sino-Global Shipping America has not been able to reap as much as its average peer.
In terms of returns from investment, Sino-Global Shipping America has not invested its equity funds well, leading to a 11.33% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 7.56% exceeds the US Infrastructure industry of 6.41%, indicating Sino-Global Shipping America has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Sino-Global Shipping America’s debt level, has declined over the past 3 years from 11.71% to 10.15%.
What does this mean?
Sino-Global Shipping America’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have unpredictable earnings, can have many factors impacting its business. I recommend you continue to research Sino-Global Shipping America to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for SINO’s future growth? Take a look at our free research report of analyst consensus for SINO’s outlook.
- Financial Health: Is SINO’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 March 2018. 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.