Analyzing XMH Holdings Ltd’s (SGX:BQF) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess BQF’s recent performance announced on 31 July 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for XMH Holdings
Was BQF weak performance lately part of a long-term decline?
I prefer 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 allows me to examine different companies on a more comparable basis, using the most relevant data points. For XMH Holdings, the latest earnings -SGD1.2M, which, in comparison to the previous year’s level, has turned from positive to negative. Given that these figures may be somewhat short-term thinking, I’ve calculated an annualized five-year figure for BQF’s net income, which stands at SGD7.3M.
We can further examine XMH Holdings’s loss by looking at what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over past couple of years has increased by a mere 5.84%. Given that top-line growth is also pretty stale the key to profitability going forward would be managing cost growth rates. Eyeballing growth from a sector-level, the SG trading companies and distributors industry has been growing, albeit, at a muted single-digit rate of 8.95% in the prior twelve months, . This is a turnaround from a volatile drop of -4.31% in the previous couple of years. This shows that whatever tailwind the industry is profiting from, XMH Holdings has not been able to realize the gains unlike its industry peers.
What does this mean?
Though XMH Holdings’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most insightful step is to assess company-specific issues XMH Holdings may be facing and whether management guidance has regularly been met in the past. You should continue to research XMH Holdings to get a better picture of the stock by looking at:
1. Financial Health: Is BQF’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. Valuation: What is BQF 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 BQF is currently mispriced by the market.