Yahoo Finance Want To Invest In GL Limited (SGX:B16)? Here’s How It Performed Lately
Understanding GL Limited’s (SGX:B16) performance as a company requires examining more than earnings from one point in time. Today I will take you through a basic sense check to gain perspective on how GL is doing by evaluating its latest earnings with its longer term trend as well as its industry peers’ performance over the same period. See our latest analysis for GL
How Did B16’s Recent Performance Stack Up Against Its Past?
B16’s trailing twelve-month earnings (from 31 March 2018) of S$79.60m has jumped 74.56% compared to the previous year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -5.72%, indicating the rate at which B16 is growing has accelerated. What’s the driver of this growth? Let’s take a look at if it is merely attributable to industry tailwinds, or if GL has seen some company-specific growth.
Though both top-line and bottom-line growth rates in the past few years were on average negative, earnings were more so. While this has led to a margin contraction, it has lessened GL’s earnings contraction. Scanning growth from a sector-level, the SG hospitality industry has been growing its average earnings by double-digit 36.36% over the previous twelve months, and a flatter -1.65% over the previous five years. This means that, in the recent industry expansion, GL is able to leverage this to its advantage.
In terms of returns from investment, GL has not invested its equity funds well, leading to a 6.95% return on equity (ROE), below the sensible minimum of 20%. However, its return on assets (ROA) of 5.88% exceeds the SG Hospitality industry of 4.12%, indicating GL has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for GL’s debt level, has increased over the past 3 years from 4.43% to 4.52%. This correlates with a decrease in debt holding, with debt-to-equity ratio declining from 30.13% to 24.29% over the past 5 years.
What does this mean?
Though GL’s past data is helpful, it is only one aspect of my investment thesis. While GL has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I suggest you continue to research GL to get a more holistic view of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for B16’s future growth? Take a look at our free research report of analyst consensus for B16’s outlook.
Financial Health: Is B16’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.
