For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on JBF Industries Limited (NSEI:JBFIND) useful as an attempt to give more color around how JBF Industries is currently performing. See our latest analysis for JBF Industries
Did JBFIND perform worse than its track record and industry?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, 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 method allows me to assess various companies on a similar basis, using new information. For JBF Industries, its most recent earnings (trailing twelve month) is -₹3,403.0M, which, in comparison to last year’s figure, has become more negative. Since these values may be relatively myopic, I’ve created an annualized five-year figure for JBF Industries’s net income, which stands at ₹1,147.7M.
We can further examine JBF Industries’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years JBF Industries’s top-line has increased by a mere 5.85%, 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 IN luxury industry has been enduring some headwinds in the previous year, leading to an average earnings drop of -2.49%. This is a momentous change, given that the industry has been delivering a positive rate of 9.38%, on average, over the last five years. This shows that whatever recent headwind the industry is experiencing, it’s hitting JBF Industries harder than its peers.
What does this mean?
Though JBF Industries’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 forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues JBF Industries may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research JBF Industries to get a better picture of the stock by looking at:
-
1. Financial Health: Is JBFIND’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. 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 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.