In This Article:
For investors with a long-term horizon, assessing earnings trend over time and against industry benchmarks is more valuable than looking at a single earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Magnificent Hotel Investments Limited (HKG:201) useful as an attempt to give more color around how Magnificent Hotel Investments is currently performing.
Check out our latest analysis for Magnificent Hotel Investments
Did 201 beat its long-term earnings growth trend and its industry?
201's trailing twelve-month earnings (from 30 June 2019) of HK$256m has jumped 34% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -33%, indicating the rate at which 201 is growing has accelerated. What's enabled this growth? Let's see if it is only attributable to industry tailwinds, or if Magnificent Hotel Investments has experienced some company-specific growth.
In terms of returns from investment, Magnificent Hotel Investments has fallen short of achieving a 20% return on equity (ROE), recording 6.3% instead. However, its return on assets (ROA) of 5.6% exceeds the HK Hospitality industry of 4.7%, indicating Magnificent Hotel Investments has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Magnificent Hotel Investments’s debt level, has increased over the past 3 years from 2.5% to 4.4%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 12% to 9.8% over the past 5 years.
What does this mean?
Though Magnificent Hotel Investments's past data is helpful, it is only one aspect of my investment thesis. Recent positive growth isn't always indicative of a continued optimistic outlook. You should continue to research Magnificent Hotel Investments 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 201’s future growth? Take a look at our free research report of analyst consensus for 201’s outlook.
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Financial Health: Are 201’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 30 June 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.