Was Valuetronics Holdings Limited’s (SGX:BN2) Earnings Growth Better Than The Industry’s?
In this article, I will take a look at Valuetronics Holdings Limited’s (SGX:BN2) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, along with how the rest of BN2’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Valuetronics Holdings
Commentary On BN2’s Past Performance
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to examine different stocks on a more comparable basis, using the latest information. For Valuetronics Holdings, its most recent bottom-line (trailing twelve month) is HK$201.30M, which, relative to the prior year’s level, has risen by 43.70%. Since these figures may be fairly myopic, I’ve calculated an annualized five-year figure for BN2’s earnings, which stands at HK$143.98M This means on average, Valuetronics Holdings has been able to steadily raise its earnings over the past couple of years as well.
What’s enabled this growth? Well, let’s take a look at if it is only attributable to an industry uplift, or if Valuetronics Holdings has experienced some company-specific growth. Over the past few years, Valuetronics Holdings expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Viewing growth from a sector-level, the SG electronic industry has been growing its average earnings by double-digit 48.26% over the prior year, and a more muted 4.61% over the past half a decade. This suggests that any tailwind the industry is benefiting from, Valuetronics Holdings has not been able to reap as much as its average peer.
What does this mean?
Valuetronics Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Valuetronics Holdings gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Valuetronics Holdings to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for BN2’s future growth? Take a look at our free research report of analyst consensus for BN2’s outlook.
Financial Health: Is BN2’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 December 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.
