Want To Invest In CosmoSteel Holdings Limited (SGX:B9S)? Here’s How It Performed Lately

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 CosmoSteel Holdings Limited (SGX:B9S) useful as an attempt to give more color around how CosmoSteel Holdings is currently performing. View our latest analysis for CosmoSteel Holdings

Was B9S’s recent earnings decline indicative of a tough track record?

I like to use the ‘latest twelve-month’ data, 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 technique allows me to examine different stocks on a similar basis, using new information. For CosmoSteel Holdings, its latest earnings (trailing twelve month) is -SGD9.4M, which compared to last year’s figure, has become more negative. Given that these values are fairly short-term, I’ve determined an annualized five-year figure for CosmoSteel Holdings’s earnings, which stands at SGD2.2M.

SGX:B9S Income Statement Jan 4th 18
SGX:B9S Income Statement Jan 4th 18

Additionally, we can analyze CosmoSteel Holdings’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last couple of years has been negative at -10.40%. The key to profitability here is to make sure the company’s cost growth is well-managed. Inspecting growth from a sector-level, the SG energy equipment and services industry has been growing its average earnings by double-digit 42.22% in the past year, and a more subdued 2.41% over the past five. This means that any tailwind the industry is enjoying, CosmoSteel Holdings has not been able to gain as much as its industry peers.

What does this mean?

Though CosmoSteel Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most useful step is to examine company-specific issues CosmoSteel Holdings may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research CosmoSteel Holdings to get a better picture of the stock by looking at:

1. Financial Health: Is B9S’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 30 September 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.