For investors, increase in profitability and industry-beating performance can be essential considerations in an investment. Below, I will examine Pursuit Minerals Limited’s (ASX:PUR) track record on a high level, to give you some insight into how the company has been performing against its long term trend and its industry peers. View our latest analysis for Pursuit Minerals

How Well Did PUR Perform?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. This enables me to assess various companies in a uniform manner using new information. For Pursuit Minerals, its latest earnings (trailing twelve month) is -AU$689.40K, which, against last year’s figure, has turned from positive to negative. Given that these figures may be relatively short-term thinking, I’ve determined an annualized five-year value for Pursuit Minerals’s net income, which stands at -AU$3.56M. This shows that, while net income is negative, it has become less negative over the years.

We can further examine Pursuit Minerals’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Pursuit Minerals’s top-line has increased by 37.59% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the Australian metals and mining industry has been growing its average earnings by double-digit 13.86% in the previous year, and 13.00% over the past five. This means any uplift the industry is benefiting from, Pursuit Minerals has not been able to realize the gains unlike its average peer.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most useful step is to assess company-specific issues Pursuit Minerals may be facing and whether management guidance has dependably been met in the past. You should continue to research Pursuit Minerals to get a better picture of the stock by looking at:

• 1. Financial Health: Is PUR’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.

• 2. 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 30 June 2017. 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.