Yahoo Finance OKH Global Ltd’s (SGX:S3N) Earnings Dropped -17.27%, How Did It Fare Against The Industry?
When OKH Global Ltd (SGX:S3N) released its most recent earnings update (31 March 2018), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were OKH Global’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not S3N actually performed well. Below is a quick commentary on how I see S3N has performed. See our latest analysis for OKH Global
Was S3N’s recent earnings decline indicative of a tough track record?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This technique allows me to examine various companies on a similar basis, using the latest information. For OKH Global, its most recent trailing-twelve-month earnings is -S$45.16M, which, relative to the previous year’s figure, has become more negative. Given that these figures may be fairly short-term thinking, I have created an annualized five-year value for OKH Global’s net income, which stands at -S$812.51K. This doesn’t seem to paint a better picture, since earnings seem to have consistently been getting more and more negative over time.
We can further evaluate OKH Global’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years OKH Global’s top-line has grown by a mere 3.31%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the SG construction industry has been enduring some headwinds over the previous year, leading to average earnings dropping by more than half. This is a a substantial change, given that the industry has been delivering a relatively flat growth rate over the last couple of years. This means that though OKH Global is presently running a loss, any recent headwind the industry is facing, the impact on OKH Global has been softer relative to its peers.
What does this mean?
OKH Global’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most insightful step is to examine company-specific issues OKH Global may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research OKH Global to get a more holistic view of the stock by looking at:
Financial Health: Is S3N’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.
Valuation: What is S3N 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 S3N is currently mispriced by the market.
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 31 March 2018. 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.
