Measuring IAG Holdings Limited’s (SEHK:8513) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 8513’s recent performance announced on 31 December 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for IAG Holdings
Was 8513’s recent earnings decline worse than the long-term trend and the industry?
I look at 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 enables me to examine different stocks on a more comparable basis, using the latest information. For IAG Holdings, its most recent trailing-twelve-month earnings is -S$822.00K, which, against last year’s level, has turned from positive to negative. Since these figures are fairly short-term thinking, I’ve determined an annualized five-year figure for IAG Holdings’s earnings, which stands at S$953.38K.
We can further examine IAG Holdings’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years IAG Holdings’s top-line has risen by a mere 8.27%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the HK medical equipment industry has been growing its average earnings by double-digit 18.98% in the previous year, . This is a turnaround from a volatile drop of -7.68% in the past couple of years. This suggests that whatever tailwind the industry is deriving benefit from, IAG Holdings has not been able to gain as much as its average peer.
What does this mean?
While past data is useful, it 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 useful step is to examine company-specific issues IAG Holdings may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research IAG Holdings to get a more holistic view of the stock by looking at:
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1. Financial Health: Is 8513’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.
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2. Valuation: What is 8513 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 8513 is currently mispriced by the market.
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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.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.