The Hour Glass Limited's (SGX:AGS) Shares Not Telling The Full Story
The Hour Glass Limited's (SGX:AGS) Shares Not Telling The Full Story
The Hour Glass Limited's (SGX:AGS) price-to-earnings (or "P/E") ratio of 5.8x might make it look like a strong buy right now compared to the market in Singapore, where around half of the companies have P/E ratios above 13x and even P/E's above 22x are quite common. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so limited.
For example, consider that Hour Glass' financial performance has been poor lately as its earnings have been in decline. One possibility is that the P/E is low because investors think the company won't do enough to avoid underperforming the broader market in the near future. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
View our latest analysis for Hour Glass
We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Hour Glass' earnings, revenue and cash flow.How Is Hour Glass' Growth Trending?
There's an inherent assumption that a company should far underperform the market for P/E ratios like Hour Glass' to be considered reasonable.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 3.8%. Still, the latest three year period has seen an excellent 151% overall rise in EPS, in spite of its unsatisfying short-term performance. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 8.8% shows it's noticeably more attractive on an annualised basis.
In light of this, it's peculiar that Hour Glass' P/E sits below the majority of other companies. It looks like most investors are not convinced the company can maintain its recent growth rates.
What We Can Learn From Hour Glass' P/E?
While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
Our examination of Hour Glass revealed its three-year earnings trends aren't contributing to its P/E anywhere near as much as we would have predicted, given they look better than current market expectations. When we see strong earnings with faster-than-market growth, we assume potential risks are what might be placing significant pressure on the P/E ratio. It appears many are indeed anticipating earnings instability, because the persistence of these recent medium-term conditions would normally provide a boost to the share price.
Don't forget that there may be other risks. For instance, we've identified 1 warning sign for Hour Glass that you should be aware of.
If P/E ratios interest you, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Hour Glass Limited(新加坡證券交易所股票代碼:AGS)的市盈率(或 “市盈率”)爲5.8倍,與新加坡市場相比,目前可能看起來像是一個強勁的買盤。新加坡約有一半公司的市盈率超過13倍,甚至市盈率超過22倍也很常見。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率如此有限。
例如,假設Hour Glass最近由於收益下降而財務表現不佳。一種可能性是市盈率很低,因爲投資者認爲該公司在避免在不久的將來表現不佳方面做得還不夠。如果你喜歡這家公司,你希望情況並非如此,這樣你就有可能在它失寵的時候買入一些股票。
查看我們對 Hour Glass 的最新分析
我們沒有分析師的預測,但您可以查看我們關於Hour Glass收益、收入和現金流的免費報告,了解最近的趨勢如何爲公司未來做好準備。Hour Glass 的增長趨勢如何?
人們固有的假設是,如果像Hour Glass這樣的市盈率才算合理,公司的表現應該遠遠低於市場。
如果我們回顧一下去年的收益,令人沮喪的是,該公司的利潤下降了3.8%。儘管如此,儘管短期表現不令人滿意,但最近三年的每股收益總體增長了151%。因此,儘管股東們本來希望保持盈利,但他們可能會對中期收益增長率表示歡迎。
將最近的中期收益軌跡與整個市場對8.8%的增長預測進行權衡,可以看出,按年計算,其吸引力明顯更大。
有鑑於此,奇怪的是,Hour Glass的市盈率低於其他大多數公司。看來大多數投資者不相信該公司能夠維持其最近的增長率。
我們可以從Hour Glass的市盈率中學到什麼?
儘管市盈率不應該成爲決定你是否買入股票的決定性因素,但它是衡量收益預期的有力晴雨表。
我們對Hour Glass的審查顯示,其三年收益趨勢對市盈率的貢獻沒有我們預期的那麼大,因爲這些趨勢看起來好於當前的市場預期。當我們看到強勁的收益和快於市場的增長速度時,我們假設潛在風險可能會給市盈率帶來巨大壓力。看來許多人確實在預期收益不穩定,因爲近期這些中期狀況的持續下去通常會提振股價。
別忘了可能還有其他風險。例如,我們已經確定了 Hour Glass 的 1 個警告標誌,你應該注意這一點。
如果您對市盈率感興趣,則不妨免費查看其他盈利增長強勁且市盈率低的公司。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,發送電子郵件給編輯組(網址爲)simplywallst.com。
Simply Wall St 的這篇文章本質上是籠統的。我們僅使用公正的方法提供基於歷史數據和分析師預測的評論,我們的文章並非旨在提供財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不會考慮最新的價格敏感型公司公告或定性材料。華爾街只是沒有持有上述任何股票的頭寸。
譯文內容由第三人軟體翻譯。
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