Assessing Bonvests Holdings Limited’s (SGX:B28) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how Bonvests Holdings is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its industrials industry peers. Check out our latest analysis for Bonvests Holdings

Commentary On B28’s Past Performance

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 blend enables me to examine many different companies on a more comparable basis, using the latest information. For Bonvests Holdings, its most recent earnings (trailing twelve month) is S$13.22M, which, relative to the previous year’s figure, has sunken by a non-trivial -75.93%. Given that these values may be fairly short-term, I have determined an annualized five-year figure for Bonvests Holdings’s net income, which stands at S$42.37M This doesn’t look much better, as earnings seem to have gradually been deteriorating over the longer term.

What could be happening here? Let’s examine what’s occurring with margins and whether the entire industry is facing the same headwind. Revenue growth over the past few years, has been positive, however, earnings growth has failed to keep up meaning Bonvests Holdings has been growing its expenses by a lot more. This harms margins and earnings, and is not a sustainable practice. Looking at growth from a sector-level, the SG industrials industry has been growing, albeit, at a unexciting single-digit rate of 8.55% in the previous year, and 2.55% over the past five years. This shows that any uplift the industry is profiting from, Bonvests Holdings has not been able to leverage it as much as its industry peers.

What does this mean?

Though Bonvests Holdings’s past data is helpful, it is only one aspect of my investment thesis. Usually companies that experience an extended period of reduction in earnings are undergoing some sort of reinvestment phase with the aim of keeping up with the latest industry disruption and expansion. I suggest you continue to research Bonvests Holdings to get a more holistic view of the stock by looking at:

1. Financial Health: Is B28’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 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.