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Assessing UMS Holdings Limited’s (SGX:558) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess 558’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. Check out our latest analysis for UMS Holdings
Did 558 beat its long-term earnings growth trend and its industry?
I prefer to 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 enables me to examine various companies in a uniform manner using new information. For UMS Holdings, its latest earnings (trailing twelve month) is S$52.04M, which compared to last year’s figure, has soared up by over 100%. Since these figures are fairly myopic, I’ve estimated an annualized five-year figure for UMS Holdings’s net income, which stands at S$28.21M This means on average, UMS Holdings has been able to steadily raise its net income over the past few years as well.
What’s the driver of this growth? Let’s see if it is only attributable to industry tailwinds, or if UMS Holdings has experienced some company-specific growth. In the last few years, UMS Holdings increased its bottom line faster than revenue by successfully controlling its costs. This resulted in a margin expansion and profitability over time. Looking at growth from a sector-level, the SG semiconductor industry has been growing growth, more than doubling average earnings over the prior twelve months, and a substantial 20.47% over the past half a decade. This shows that any uplift the industry is enjoying, UMS Holdings has not been able to realize the gains unlike its industry peers.
What does this mean?
While past data is useful, it 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 UMS Holdings 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 558’s future growth? Take a look at our free research report of analyst consensus for 558’s outlook.
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Financial Health: Is 558’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 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.