Where Sheng Siong Group Ltd's (SGX:OV8) Earnings Growth Stands Against Its Industry
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For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Sheng Siong Group Ltd (SGX:OV8) useful as an attempt to give more color around how Sheng Siong Group is currently performing.
See our latest analysis for Sheng Siong Group
Commentary On OV8's Past Performance
OV8's trailing twelve-month earnings (from 31 March 2019) of S$72m has increased by 1.3% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 11%, indicating the rate at which OV8 is growing has slowed down. To understand what's happening, let’s take a look at what’s going on with margins and whether the whole industry is feeling the heat.
In terms of returns from investment, Sheng Siong Group has invested its equity funds well leading to a 23% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 15% exceeds the SG Consumer Retailing industry of 3.9%, indicating Sheng Siong Group has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Sheng Siong Group’s debt level, has declined over the past 3 years from 26% to 25%.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Sheng Siong Group to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for OV8’s future growth? Take a look at our free research report of analyst consensus for OV8’s outlook.
Financial Health: Are OV8’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 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 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. Thank you for reading.
