After reading JBF Industries Limited’s (NSEI:JBFIND) most recent earnings announcement (31 March 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether JBF Industries’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. See our latest analysis for JBF Industries
Did JBFIND perform worse than its track record and industry?
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This allows me to assess many different companies in a uniform manner using the most relevant data points. For JBF Industries, its latest earnings (trailing twelve month) is -₹3.40B, which, in comparison to last year’s level, has become more negative. Since these values are somewhat myopic, I’ve estimated an annualized five-year value for JBF Industries’s earnings, which stands at ₹942.38M.We can further evaluate JBF Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years JBF Industries’s top-line has risen by a mere 5.60%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Eyeballing growth from a sector-level, the IN luxury industry has been growing, albeit, at a muted single-digit rate of 6.16% in the past year, and a substantial 10.89% over the previous five years. This shows that any uplift the industry is profiting from, JBF Industries has not been able to realize the gains unlike its average peer.
What does this mean?
JBF Industries’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will happen in the future and when. The most insightful step is to examine company-specific issues JBF Industries may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research JBF Industries to get a more holistic view of the stock by looking at:
- Financial Health: Is JBFIND’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.