After reading Yangtze River Port and Logistics Limited’s (NASDAQ:YRIV) most recent earnings announcement (30 September 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 tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways. See our latest analysis for Yangtze River Port and Logistics
Commentary On YRIV’s Past Performance
For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 analyze different companies on a more comparable basis, using new information. For Yangtze River Port and Logistics, its latest earnings (trailing twelve month) is -US$12.09M, which compared to the prior year’s figure, has become less negative. Given that these figures may be fairly myopic, I’ve estimated an annualized five-year figure for Yangtze River Port and Logistics’s net income, which stands at -US$8.92M. This means Yangtze River Port and Logistics has historically performed better than recently, while it seems like earnings are now heading back towards a more favorable position once more.We can further evaluate Yangtze River Port and Logistics’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Yangtze River Port and Logistics has seen an annual decline in revenue of -73.65%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the US infrastructure industry has been growing its average earnings by double-digit 22.96% in the previous year, and a less exciting 7.64% over the previous five years. This means that whatever uplift the industry is benefiting from, Yangtze River Port and Logistics has not been able to reap as much as its average peer.
What does this mean?
Though Yangtze River Port and Logistics’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to predict what will happen in the future and when. The most useful step is to examine company-specific issues Yangtze River Port and Logistics may be facing and whether management guidance has dependably been met in the past. You should continue to research Yangtze River Port and Logistics to get a more holistic view of the stock by looking at:
- 1. Financial Health: Is YRIV’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 YRIV 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 YRIV 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.