Assessing Techtronic Industries Company Limited’s (SEHK:669) 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 669’s recent performance announced on 30 June 2017 and evaluate these figures to its longer term trend and industry movements. See our latest analysis for Techtronic Industries

How Did 669’s Recent Performance Stack Up Against Its Past?

I like to use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks on a more comparable basis, using the latest information. For Techtronic Industries, its most recent bottom-line (trailing twelve month) is $436.4M, which, in comparison to the previous year’s level, has risen by 17.07%. Given that these figures are somewhat myopic, I’ve calculated an annualized five-year value for 669’s earnings, which stands at $269.3M. This suggests that, generally, Techtronic Industries has been able to gradually improve its net income over the past few years as well.

What’s the driver of this growth? Let’s see whether it is merely attributable to an industry uplift, or if Techtronic Industries has experienced some company-specific growth. In the past few years, Techtronic Industries increased its bottom line faster than revenue by effectively controlling its costs. This resulted in a margin expansion and profitability over time. Scanning growth from a sector-level, the HK consumer durables industry has been growing its average earnings by double-digit 10.90% in the past twelve months, . This is a turnaround from a volatile drop of -3.12% in the last couple of years. This suggests that, in the recent industry expansion, Techtronic Industries is capable of leveraging this to its advantage.

What does this mean?

Though Techtronic Industries’s past data is helpful, it is only one aspect of my investment thesis. Companies that have performed well in the past, such as Techtronic Industries gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Techtronic Industries to get a more holistic view of the stock by looking at:

• 1. Future Outlook: What are well-informed industry analysts predicting for 669’s future growth? Take a look at our free research report of analyst consensus for 669’s outlook.

• 2. Financial Health: Is 669’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 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.