Assessing Straco Corporation Limited's (SGX:S85) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess S85's recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Straco
Commentary On S85's Past Performance
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, 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 enables me to examine different companies on a similar basis, using new information. For Straco, its most recent trailing-twelve-month earnings is S$47.74M, which, against the previous year's figure, has risen by a fairly soft 2.74%. Given that these values are relatively nearsighted, I’ve computed an annualized five-year figure for S85's earnings, which stands at S$35.11M This suggests that, on average, Straco has been able to steadily grow its profits over the past few years as well.How has it been able to do this? Let's take a look at if it is merely attributable to industry tailwinds, or if Straco has experienced some company-specific growth. The rise in earnings seems to be driven by a solid top-line increase beating its growth rate of costs. Though this has led to a margin contraction, it has made Straco more profitable. Looking at growth from a sector-level, the SG hospitality industry has been growing its average earnings by double-digit 22.87% over the past twelve months, . This is a change from a volatile drop of -5.55% in the last couple of years. This shows that, in the recent industry expansion, Straco has not been able to leverage it as much as its industry peers.
What does this mean?
Though Straco's past data is helpful, it is only one aspect of my investment thesis. While Straco has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I suggest you continue to research Straco to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is S85’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.
- 2. Valuation: What is S85 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 S85 is currently mispriced by the market.
- 3. 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.
Valuation is complex, but we're helping make it simple.
Find out whether Straco is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free Analysis
Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Straco Corporation Limited, together with its subsidiaries, engages in the development and management of tourism-related businesses in Singapore and the People’s Republic of China.
The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.
|Analysis Area||Score (0-6)|
Read more about these checks in the individual report sections or in our analysis model.
Excellent balance sheet not a dividend payer.