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Assessing KSH Holdings Limited’s (SGX:ER0) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess ER0’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. See our latest analysis for KSH Holdings
How Did ER0’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend enables me to examine various companies on a more comparable basis, using the most relevant data points. For KSH Holdings, its most recent trailing-twelve-month earnings is S$34.09M, which, in comparison to last year’s figure, has plunged by -18.21%. Given that these figures may be fairly short-term thinking, I have created an annualized five-year figure for ER0’s earnings, which stands at S$38.75M This doesn’t seem to paint a better picture, as earnings seem to have consistently been diminishing over time.
What could be happening here? Well, let’s look at what’s going on with margins and if the whole industry is facing the same headwind. Over the last few years, revenue growth has fallen behind earnings, which indicates that KSH Holdings’s bottom line has been propelled by unmaintainable cost-cutting. Scanning growth from a sector-level, the SG construction industry has been enduring some headwinds over the past few years, leading to an average earnings drop of -7.61% in the most recent year. This suggests that any headwind the industry is enduring, it’s hitting KSH Holdings harder than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Generally companies that experience a drawn out period of reduction in earnings are undergoing some sort of reinvestment phase Although, if the entire industry is struggling to grow over time, it may be a signal of a structural change, which makes KSH Holdings and its peers a higher risk investment. You should continue to research KSH Holdings to get a more holistic view of the stock by looking at:
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1. Future Outlook: What are well-informed industry analysts predicting for ER0’s future growth? Take a look at our free research report of analyst consensus for ER0’s outlook.
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2. Financial Health: Is ER0’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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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.