In This Article:
Examining how Time Watch Investments Limited (SEHK:2033) is performing as a company requires looking at more than just a years' earnings. Below, I will run you through a simple sense check to build perspective on how Time Watch Investments is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its luxury industry peers.
Check out our latest analysis for Time Watch Investments
Commentary On 2033's Past Performance
2033's trailing twelve-month earnings (from 30 June 2019) of HK$305m has increased by 4.8% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -3.9%, indicating the rate at which 2033 is growing has accelerated. How has it been able to do this? Let's take a look at if it is solely because of an industry uplift, or if Time Watch Investments has experienced some company-specific growth.
In terms of returns from investment, Time Watch Investments has fallen short of achieving a 20% return on equity (ROE), recording 14% instead. However, its return on assets (ROA) of 10.0% exceeds the HK Luxury industry of 5.1%, indicating Time Watch Investments has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for Time Watch Investments’s debt level, has declined over the past 3 years from 18% to 14%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 2.4% to 9.5% over the past 5 years.
What does this mean?
Time Watch Investments's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Time Watch Investments to get a better picture of the stock by looking at:
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Financial Health: Are 2033’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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Valuation: What is 2033 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 2033 is currently mispriced by the market.
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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 30 June 2019. This may not be consistent with full year annual report figures.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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