In This Article:
Aminex PLC’s (LON:AEX): Aminex PLC, through its subsidiaries, explores for, develops, and produces oil and gas reserves primarily in Tanzania and Europe. The UK£58m market-cap posted a loss in its most recent financial year of -US$2m and a latest trailing-twelve-month loss of -US$6m leading to an even wider gap between loss and breakeven. As path to profitability is the topic on AEX’s investors mind, I’ve decided to gauge market sentiment. I’ve put together a brief outline of industry analyst expectations for AEX, its year of breakeven and its implied growth rate.
View our latest analysis for Aminex
AEX is bordering on breakeven, according to Oil and Gas analysts. They anticipate the company to incur a final loss in 2019, before generating positive profits of US$3m in 2020. So, AEX is predicted to breakeven approximately a couple of months from now! How fast will AEX have to grow each year in order to reach the breakeven point by 2020? Working backwards from analyst estimates, it turns out that they expect the company to grow 92% year-on-year, on average, which signals high confidence from analysts. If this rate turns out to be too aggressive, AEX may become profitable much later than analysts predict.
I’m not going to go through company-specific developments for AEX given that this is a high-level summary, however, keep in mind that typically oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
One thing I’d like to point out is that AEX has no debt on its balance sheet, which is rare for a loss-making oil and gas company, which typically has high debt relative to its equity. AEX currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are key fundamentals of AEX which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at AEX, take a look at AEX’s company page on Simply Wall St. I’ve also compiled a list of pertinent aspects you should further examine:
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Valuation: What is AEX worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether AEX is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Aminex’s board and the CEO’s back ground.
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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.
To help readers see past 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. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.