After reading AMVIG Holdings Limited’s (HKG:2300) most recent earnings announcement (30 June 2018), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is a crucial aspect. Below is a brief commentary on my key takeaways.

See our latest analysis for AMVIG Holdings

How Did 2300’s Recent Performance Stack Up Against Its Past?

2300’s trailing twelve-month earnings (from 30 June 2018) of HK$334m has jumped 48% compared to the previous year.

Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -11%, indicating the rate at which 2300 is growing has accelerated. What’s the driver of this growth? Well, let’s take a look at if it is only because of industry tailwinds, or if AMVIG Holdings has seen some company-specific growth.

In terms of returns from investment, AMVIG Holdings has fallen short of achieving a 20% return on equity (ROE), recording 9.6% instead. Furthermore, its return on assets (ROA) of 5.6% is below the HK Packaging industry of 6.2%, indicating AMVIG Holdings’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for AMVIG Holdings’s debt level, has declined over the past 3 years from 10% to 8.3%.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Recent positive growth doesn’t necessarily mean it’s onwards and upwards for the company. I suggest you continue to research AMVIG Holdings to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for 2300’s future growth? Take a look at our free research report of analyst consensus for 2300’s outlook.

2. Financial Health: Are 2300’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.

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 30 June 2018. This may not be consistent with full year annual report figures.

To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.