Yahoo Finance Telechoice International Limited (SGX:T41): Has Recent Earnings Growth Beaten Long-Term Trend?
Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess Telechoice International Limited’s (SGX:T41) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Telechoice International
How Well Did T41 Perform?
T41’s trailing twelve-month earnings (from 31 March 2018) of S$8.13m has jumped 18.64% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 1.22%, indicating the rate at which T41 is growing has accelerated. How has it been able to do this? Let’s see whether it is solely a result of industry tailwinds, or if Telechoice International has seen some company-specific growth.
The climb in earnings seems to be bolstered by a solid top-line increase outpacing its growth rate of expenses. Though this has caused a margin contraction, it has made Telechoice International more profitable. Scanning growth from a sector-level, the SG electronic industry has been growing its average earnings by double-digit 32.88% over the previous twelve months, and a more subdued 8.04% over the previous five years. This means whatever uplift the industry is deriving benefit from, Telechoice International has not been able to realize the gains unlike its average peer.
In terms of returns from investment, Telechoice International has not invested its equity funds well, leading to a 10.98% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 4.97% is below the SG Electronic industry of 5.30%, indicating Telechoice International’s are utilized less efficiently. And finally, its return on capital (ROC), which also accounts for Telechoice International’s debt level, has declined over the past 3 years from 14.04% to 12.41%.
What does this mean?
Telechoice International’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Recent positive growth isn’t always indicative of a continued optimistic outlook. There may be variables that are impacting the entire industry thus the high industry growth rate over the same time period. I recommend you continue to research Telechoice International to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for T41’s future growth? Take a look at our free research report of analyst consensus for T41’s outlook.
Financial Health: Is T41’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 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.
