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 Q & M Dental Group (Singapore) Limited (SGX:QC7) useful as an attempt to give more color around how Q & M Dental Group (Singapore) is currently performing. See our latest analysis for Q & M Dental Group (Singapore)

Was QC7 weak performance lately part of a long-term decline?

I prefer 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 technique allows me to assess various companies on a similar basis, using new information. For Q & M Dental Group (Singapore), its latest trailing-twelve-month earnings is S$23.87M, which, relative to last year’s figure, has fallen by -15.66%. Given that these values may be somewhat short-term thinking, I have calculated an annualized five-year value for QC7’s net income, which stands at S$11.78M This means though earnings declined from the prior year, over the long run, Q & M Dental Group (Singapore)’s profits have been rising on average.

How has it been able to do this? Let’s see if it is merely a result of industry tailwinds, or if Q & M Dental Group (Singapore) has seen some company-specific growth. In the past few years, Q & M Dental Group (Singapore) expanded its bottom line faster than revenue by efficiently controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the SG healthcare industry has been relatively flat in terms of earnings growth over the previous few years. This means whatever recent headwind the industry is facing, it’s hitting Q & M Dental Group (Singapore) harder than its peers.

What does this mean?

Q & M Dental Group (Singapore)’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that are profitable, but have capricious earnings, can have many factors impacting its business. I recommend you continue to research Q & M Dental Group (Singapore) to get a more holistic view of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for QC7’s future growth? Take a look at our free research report of analyst consensus for QC7’s outlook.

• 2. Financial Health: Is QC7’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.

• 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 31 December 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.