For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Comstock Mining Inc’s (AMEX:LODE) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for Comstock Mining

Could LODE beat the long-term trend and outperform its industry?

For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, 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 different companies on a more comparable basis, using the most relevant data points. For Comstock Mining, its most recent bottom-line (trailing twelve month) is -US$10.58M, which, against the prior year’s level, has become less negative. Given that these values are relatively nearsighted, I have computed an annualized five-year value for Comstock Mining’s earnings, which stands at -US$23.29M. This shows that, although net income is negative, it has become less negative over the years.

We can further analyze Comstock Mining’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Comstock Mining’s top-line has increased by a mere 4.51%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Eyeballing growth from a sector-level, the US metals and mining industry has been growing average earnings growth of 51.25% over the previous year, and a flatter -0.20% over the past five. This means any uplift the industry is deriving benefit from, Comstock Mining has not been able to realize the gains unlike 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 hard to predict what will occur going forward, and when. The most useful step is to examine company-specific issues Comstock Mining may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Comstock Mining to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is LODE’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 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.