Assessing LEAP Holdings Group Limited’s (SEHK:1499) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 1499’s recent performance announced on 30 September 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for LEAP Holdings Group
How Did 1499’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use 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 blend enables me to examine different companies on a more comparable basis, using the most relevant data points. For LEAP Holdings Group, its most recent earnings (trailing twelve month) is HK$43.18M, which, relative to the prior year’s level, has moved up by a significant 64.74%. Given that these figures may be relatively myopic, I’ve estimated an annualized five-year value for 1499’s earnings, which stands at HK$27.46M This suggests that, generally, LEAP Holdings Group has been able to consistently improve its bottom line over the last few years as well.What’s the driver of this growth? Let’s take a look at whether it is solely owing to industry tailwinds, or if LEAP Holdings Group has experienced some company-specific growth. The rise in earnings seems to be bolstered by a strong top-line increase overtaking its growth rate of expenses. Though this has led to a margin contraction, it has made LEAP Holdings Group more profitable. Eyeballing growth from a sector-level, the HK construction industry has been enduring some headwinds over the past year, leading to an average earnings drop of -7.15%. This is a momentous change, given that the industry has been delivering a positive rate of 9.50%, on average, over the past half a decade. This suggests that whatever recent headwind the industry is experiencing, the impact on LEAP Holdings Group has been softer relative to its peers.
What does this mean?
Though LEAP Holdings Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as LEAP Holdings Group gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I suggest you continue to research LEAP Holdings Group to get a better picture of the stock by looking at:
- Financial Health: Is 1499’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.
- Valuation: What is 1499 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 1499 is currently mispriced by the market.
- 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.