Examining Abterra Ltd’s (SGX:L5I) past track record of performance is a valuable exercise for investors. It enables us to understand whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess L5I’s latest performance announced on 31 December 2017 and weigh these figures against its longer term trend and industry movements. Check out our latest analysis for Abterra
How Did L5I’s Recent Performance Stack Up Against Its Past?
I like to use the ‘latest twelve-month’ data, 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 blend allows me to assess many different companies on a similar basis, using the most relevant data points. For Abterra, its most recent earnings (trailing twelve month) is -S$6.13M, which, relative to the previous year’s level, has become less negative. Given that these figures may be somewhat nearsighted, I have created an annualized five-year value for L5I’s earnings, which stands at -S$20.59M. This means although net income is negative, it has become less negative over the years.
We can further assess Abterra’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Abterra’s top-line has grown by a mere 4.83%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Inspecting growth from a sector-level, the SG trade distributors industry has been enduring some headwinds over the last couple of years, leading to an average earnings drop of -11.69% in the most recent year. This means despite the fact that Abterra is currently loss-making, any recent headwind the industry is facing, the impact on Abterra has been softer relative to its peers.
What does this mean?
Abterra’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Abterra may be facing and whether management guidance has dependably been met in the past. You should continue to research Abterra to get a more holistic view of the stock by looking at:
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Financial Health: Is L5I’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.