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Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at Kerry Logistics Network Limited’s (SEHK:636) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for Kerry Logistics Network
Did 636 beat its long-term earnings growth trend and its industry?
I look at 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 technique enables me to analyze different companies in a uniform manner using new information. For Kerry Logistics Network, its most recent trailing-twelve-month earnings is HK$1.96B, which, relative to last year’s level, has risen by a relatively muted 7.91%. Given that these values may be relatively nearsighted, I have determined an annualized five-year figure for 636’s earnings, which stands at HK$1.65B This shows that, on average, Kerry Logistics Network has been able to steadily raise its bottom line over the last couple of years as well.
How has it been able to do this? Let’s see whether it is solely because of an industry uplift, or if Kerry Logistics Network has seen some company-specific growth. In the past couple of years, Kerry Logistics Network grew its bottom line faster than revenue by effectively controlling its costs. This has led to a margin expansion and profitability over time. Scanning growth from a sector-level, the HK logistics industry has been enduring some headwinds over the last couple of years, leading to an average earnings drop of -22.19% in the most recent year. This shows that whatever recent headwind the industry is facing, Kerry Logistics Network is relatively better-cushioned than its peers.
What does this mean?
Though Kerry Logistics Network’s past data is helpful, it is only one aspect of my investment thesis. While Kerry Logistics Network 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 Kerry Logistics Network to get a more holistic view of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for 636’s future growth? Take a look at our free research report of analyst consensus for 636’s outlook.
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2. Financial Health: Is 636’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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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 30 June 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.