Today I will examine Best World International Limited’s (SGX:CGN) latest earnings update (31 March 2018) and compare these figures against its performance over the past couple of years, in addition to how the rest of CGN’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. View our latest analysis for Best World International
How CGN fared against its long-term earnings performance and its industry
I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to assess different stocks on a similar basis, using the most relevant data points. For Best World International, its most recent earnings (trailing twelve month) is S$51.72M, which compared to the previous year’s level, has increased by 34.94%. Since these figures are relatively short-term thinking, I’ve created an annualized five-year figure for Best World International’s net income, which stands at S$13.81M This means that, generally, Best World International has been able to increasingly raise its bottom line over the last few years as well.
What’s enabled this growth? Let’s take a look at if it is merely owing to industry tailwinds, or if Best World International has experienced some company-specific growth. In the last couple of years, Best World International grew its bottom line faster than revenue by efficiently controlling its costs. This has caused a margin expansion and profitability over time. Inspecting growth from a sector-level, the SG personal products industry has been growing its average earnings by double-digit 16.76% over the past twelve months, and 11.39% over the past five years. This shows that whatever tailwind the industry is profiting from, Best World International is capable of leveraging this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that have performed well in the past, such as Best World International gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. You should continue to research Best World International to get a better picture of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for CGN’s future growth? Take a look at our free research report of analyst consensus for CGN’s outlook.
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Financial Health: Is CGN’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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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 March 2018. 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.