There's Reason For Concern Over First Ship Lease Trust's (SGX:D8DU) Massive 29% Price Jump
There's Reason For Concern Over First Ship Lease Trust's (SGX:D8DU) Massive 29% Price Jump
Those holding First Ship Lease Trust (SGX:D8DU) shares would be relieved that the share price has rebounded 29% in the last thirty days, but it needs to keep going to repair the recent damage it has caused to investor portfolios. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 33% over that time.
After such a large jump in price, when almost half of the companies in Singapore's Shipping industry have price-to-sales ratios (or "P/S") below 2.1x, you may consider First Ship Lease Trust as a stock not worth researching with its 4.7x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/S.
Check out our latest analysis for First Ship Lease Trust
What Does First Ship Lease Trust's P/S Mean For Shareholders?
As an illustration, revenue has deteriorated at First Ship Lease Trust over the last year, which is not ideal at all. Perhaps the market believes the company can do enough to outperform the rest of the industry in the near future, which is keeping the P/S ratio high. If not, then existing shareholders may be quite nervous about the viability of the share price.
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 First Ship Lease Trust's earnings, revenue and cash flow.Is There Enough Revenue Growth Forecasted For First Ship Lease Trust?
The only time you'd be truly comfortable seeing a P/S as steep as First Ship Lease Trust's is when the company's growth is on track to outshine the industry decidedly.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 42%. As a result, revenue from three years ago have also fallen 79% overall. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
This is in contrast to the rest of the industry, which is expected to decline by 9.8% over the next year, or less than the company's recent medium-term annualised revenue decline.
With this in mind, we find it intriguing that First Ship Lease Trust's P/S exceeds that of its industry peers. With revenue going quickly in reverse, it's not guaranteed that the P/S has found a floor yet. There's potential for the P/S to fall to lower levels if the company doesn't improve its top-line growth, which would be difficult to do with the current industry outlook.
The Final Word
First Ship Lease Trust's P/S has grown nicely over the last month thanks to a handy boost in the share price. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
We've established that First Ship Lease Trust currently trades on a much higher than expected P/S since its recent three-year revenues are even worse than the forecasts for a struggling industry. When we see below average revenue, we suspect the share price is at risk of declining, sending the high P/S lower. In addition, we would be concerned whether the company can even maintain its medium-term level of performance under these tough industry conditions. This would place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Before you settle on your opinion, we've discovered 3 warning signs for First Ship Lease Trust (1 is concerning!) that you should be aware of.
If strong companies turning a profit tickle your fancy, then you'll want to check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
持有第一船租賃信託(SGX: D8DU)股票的人會鬆一口氣,因爲股價在過去三十天中反彈了29%,但它需要繼續修復最近對投資者投資組合造成的損失。不幸的是,上個月的漲幅幾乎沒有彌補去年的虧損,在此期間,該股仍下跌了33%。
在價格大幅上漲之後,當新加坡航運業將近一半的公司的市銷率(或 “市銷率”)低於2.1倍時,您可以將第一船租賃信託視爲不值得研究的股票,其市銷率爲4.7倍。但是,我們需要更深入地挖掘,以確定市銷售率大幅上升是否有合理的依據。
查看我們對 First Ship Lease Trust 的最新分析
第一船租賃信託的市銷率對股東意味着什麼?
舉例來說,去年,第一船租賃信託的收入有所下降,這根本不理想。也許市場認爲該公司有足夠的能力在不久的將來跑贏其他行業,從而保持較高的市銷率。如果不是,那麼現有股東可能會對股價的可行性感到非常擔憂。
我們沒有分析師的預測,但您可以查看我們關於First Ship Lease Trust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的未來做好準備。預計第一艘船舶租賃信託的收入增長是否足夠?
只有當公司的增長有望在行業中脫穎而出時,你才能真正放心地看到像First Ship Lease Trust一樣高的市銷率。
首先回顧一下,該公司去年的收入增長並不令人興奮,因爲它公佈了令人失望的42%的跌幅。結果,三年前的總體收入也下降了79%。因此,可以公平地說,最近的收入增長對公司來說是不可取的。
這與該行業的其他部門形成鮮明對比,預計明年該行業將下降9.8%,低於該公司最近的中期年化收入下降幅度。
考慮到這一點,我們發現有趣的是,第一船租賃信託的市銷率超過了業內同行。由於收入迅速逆轉,尚不能保證市銷率已經達到下限。如果公司不改善營收增長,市銷率有可能降至較低水平,這與當前的行業前景相去甚遠。
最後一句話
得益於股價的顯著上漲,第一船租賃信託基金的市銷率在上個月增長良好。儘管市銷率不應該成爲決定你是否買入股票的決定性因素,但它是衡量收入預期的有力晴雨表。
我們已經確定,First Ship Lease Trust目前的市銷率遠高於預期,因爲其最近三年的收入甚至低於對陷入困境的行業的預期。當我們看到低於平均水平的收入時,我們懷疑股價有下跌的風險,從而降低高市銷售率。此外,我們將擔心該公司在這些艱難的行業條件下能否保持其中期業績水平。這將使股東的投資面臨重大風險,潛在投資者面臨支付過高溢價的危險。
在你確定自己的意見之前,我們已經發現了第一船租賃信託的3個警告信號(其中一個令人擔憂!)你應該注意的。
如果你喜歡強勢的公司盈利,那麼你需要免費查看這份以低市盈率進行交易(但已證明可以增加收益)的有趣公司名單。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
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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