Yahoo Finance Does SJM Holdings Limited’s (HKG:880) Recent Track Record Look Strong?
Measuring SJM Holdings Limited’s (HKG:880) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess 880’s recent performance announced on 30 June 2018 and compare these figures to its historical trend and industry movements.
Check out our latest analysis for SJM Holdings
Did 880’s recent earnings growth beat the long-term trend and the industry?
880’s trailing twelve-month earnings (from 30 June 2018) of HK$2.5b has jumped 15% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -33%, indicating the rate at which 880 is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is only because of an industry uplift, or if SJM Holdings has seen some company-specific growth.
In terms of returns from investment, SJM Holdings has fallen short of achieving a 20% return on equity (ROE), recording 9.5% instead. However, its return on assets (ROA) of 4.4% exceeds the HK Hospitality industry of 3.9%, indicating SJM Holdings has used its assets more efficiently. Though, its return on capital (ROC), which also accounts for SJM Holdings’s debt level, has declined over the past 3 years from 17% to 5.4%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 13% to 60% over the past 5 years.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There could be variables that are influencing the industry as a whole, thus the high industry growth rate over the same period of time. I recommend you continue to research SJM Holdings to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for 880’s future growth? Take a look at our free research report of analyst consensus for 880’s outlook.
Financial Health: Are 880’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.
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.
