Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Shineco Inc’s (NASDAQ:TYHT) 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 Shineco

Did TYHT’s recent earnings growth beat the long-term trend and the industry?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This technique allows me to examine different stocks in a uniform manner using the most relevant data points. For Shineco, its most recent trailing-twelve-month earnings is US$11.76M, which, in comparison to last year’s figure, has risen by a non-trivial 56.40%. Given that these values may be fairly short-term, I’ve determined an annualized five-year value for TYHT’s net income, which stands at US$7.86M This shows that, generally, Shineco has been able to steadily improve its net income over the last couple of years as well.

How has it been able to do this? Let’s take a look at whether it is solely owing to industry tailwinds, or if Shineco has seen some company-specific growth. Over the last few years, Shineco expanded its bottom line faster than revenue by successfully controlling its costs. This has led to a margin expansion and profitability over time. Inspecting growth from a sector-level, the US personal products industry has been growing its average earnings by double-digit 15.93% in the past twelve months, and 10.76% over the past five. This shows that whatever tailwind the industry is benefiting from, Shineco is capable of leveraging this to its advantage.

What does this mean?

Shineco’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Shineco to get a more holistic view of the stock by looking at:

1. Financial Health: Is TYHT’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 March 2018. 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.