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Examining how Minesto AB (publ) (OM:MINEST) is performing as a company requires looking at more than just a years’ earnings. Below, I will run you through a simple sense check to build perspective on how Minesto is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its electrical industry peers. Check out our latest analysis for Minesto

How Well Did MINEST Perform?

For the most up-to-date info, I 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 blend allows me to assess many different companies on a similar basis, using new information. For Minesto, its most recent earnings (trailing twelve month) is -KR7.87M, which, relative to the prior year’s level, has become less negative. Given that these values may be relatively myopic, I’ve calculated an annualized five-year figure for Minesto’s net income, which stands at -KR11.91M. This suggests that, although net income is negative, it has become less negative over the years.

We can further assess Minesto’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Minesto’s top-line has risen by 30.78% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Scanning growth from a sector-level, the SE electrical industry has been growing its average earnings by double-digit 18.56% in the prior year, and 17.74% over the last five years. This means although Minesto is currently loss-making, it may have benefited from industry tailwinds, moving earnings into a more favorable position.

What does this mean?

Minesto’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always hard to forecast what will happen in the future and when. The most insightful step is to examine company-specific issues Minesto may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Minesto to get a better picture of the stock by looking at:

• 1. Financial Health: Is MINEST’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.