Examining Buru Energy Limited’s (ASX:BRU) past track record of performance is a useful exercise for investors. It allows us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess BRU’s latest performance announced on 31 December 2017 and weight these figures against its longer term trend and industry movements. Check out our latest analysis for Buru Energy

How Well Did BRU 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 allows me to analyze different companies in a uniform manner using the most relevant data points. For Buru Energy, its most recent earnings (trailing twelve month) is -AU$6.20M, which, relative to the previous year’s figure, has become less negative. Given that these values are fairly myopic, I’ve calculated an annualized five-year value for BRU’s net income, which stands at -AU$23.33M. This suggests that, even though net income is negative, it has become less negative over the years.

We can further evaluate Buru Energy’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Buru Energy’s top-line has increased by a mere 5.00%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the Australian oil and gas industry has been increasing growth, more than doubling average earnings over the prior year, and a strong 11.17% over the last five years. This means whatever tailwind the industry is deriving benefit from, Buru Energy has not been able to gain as much as its industry peers.

What does this mean?

While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Buru Energy may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Buru Energy to get a more holistic view of the stock by looking at:

1. Future Outlook: What are well-informed industry analysts predicting for BRU’s future growth? Take a look at our free research report of analyst consensus for BRU’s outlook.

2. Financial Health: Is BRU’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.

3. 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 December 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.