For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at T T J Holdings Limited’s (SGX:K1Q) 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.
See our latest analysis for T T J Holdings
Commentary On K1Q’s Past Performance
K1Q’s trailing twelve-month earnings (from 31 July 2018) of S$9m has declined by -18% compared to the previous year.
Furthermore, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of -9.9%, indicating the rate at which K1Q is growing has slowed down. Why could this be happening? Well, let’s look at what’s transpiring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, T T J Holdings has fallen short of achieving a 20% return on equity (ROE), recording 6.0% instead. However, its return on assets (ROA) of 5.1% exceeds the SG Construction industry of 4.0%, indicating T T J Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for T T J Holdings’s debt level, has declined over the past 3 years from 14% to 7.8%.
What does this mean?
T T J Holdings’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Usually companies that endure a drawn out period of decline in earnings are undergoing some sort of reinvestment phase with the aim of keeping up with the latest industry disruption and growth. I suggest you continue to research T T J Holdings to get a more holistic view of the stock by looking at:
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Future Outlook: What are well-informed industry analysts predicting for K1Q’s future growth? Take a look at our free research report of analyst consensus for K1Q’s outlook.
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Financial Health: Are K1Q’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 July 2018. This may not be consistent with full year annual report figures.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.