In this article, I will take a look at Global Strategic Group Limited’s (SEHK:8007) most recent earnings update (30 September 2017) and compare these latest figures against its performance over the past few years, along with how the rest of 8007’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. See our latest analysis for Global Strategic Group
Did 8007’s recent EPS Growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, 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 blend enables me to analyze different companies on a similar basis, using the latest information. For Global Strategic Group, the most recent twelve-month earnings -HK$26.9M, which compared to the prior year’s figure, has become less negative. Since these figures are somewhat short-term, I have created an annualized five-year value for 8007’s net income, which stands at -HK$21.2M. This means that, Global Strategic Group has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards to right direction again.
Additionally, we can analyze Global Strategic Group’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the past few years has increased by 37.80%, indicating that Global Strategic Group is in a high-growth period with expenses racing ahead high top-line growth rates. Inspecting growth from a sector-level, the HK trade distributors industry has been growing its average earnings by double-digit 10.96% over the previous twelve months, and a more subdued 8.72% over the past five. This suggests that, though Global Strategic Group is currently unprofitable, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
Though Global Strategic Group’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Global Strategic Group may be facing and whether management guidance has regularly been met in the past. You should continue to research Global Strategic Group to get a better picture of the stock by looking at: