Measuring Singapore Technologies Engineering Ltd’s (SGX:S63) 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 S63’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Singapore Technologies Engineering
How Did S63’s Recent Performance Stack Up Against Its Past?
For the purpose of this commentary, I like to use 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 allows me to examine many different companies in a uniform manner using new information. “For Singapore Technologies Engineering, its “, most recent earnings is SGD513.8M, which compared to the previous year’s level, has climbed up by 12.94%. Given that these values may be relatively short-term, I’ve computed an annualized five-year figure for S63’s earnings, which stands at SGD531.8M. This means even though earnings growth from last year was positive, over the long run, Singapore Technologies Engineering’s earnings have been falling on average.
Why is this? Well, let’s look at what’s transpiring with margins and whether the entire industry is facing the same headwind. Revenue growth over the past few years, has been positive, yet earnings growth has been declining. This implies that Singapore Technologies Engineering has been ramping up expenses, which is hurting margins and earnings, and is not a sustainable practice. Viewing growth from a sector-level, the SG aerospace & defense industry has been growing its average earnings by double-digit 12.86% in the previous year, and a more muted 4.24% over the past five. This suggests that any tailwind the industry is benefiting from, Singapore Technologies Engineering is able to amplify this to its advantage.
What does this mean?
Singapore Technologies Engineering’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. There could be variables that are affecting the industry as a whole, hence the high industry growth rate over the same time frame. I recommend you continue to research Singapore Technologies Engineering to get a better picture of the stock by looking at: