Analyzing Truscott Mining Corporation Limited’s (ASX:TRM) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess TRM’s recent performance announced on 30 June 2017 and compare these figures to its long-term trend and industry movements. See our latest analysis for Truscott Mining

Were TRM’s earnings stronger than its past performances and the industry?

For the most up-to-date info, I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This method enables me to assess different stocks on a similar basis, using the most relevant data points. For Truscott Mining, its most recent bottom-line (trailing twelve month) is -AU$31.88K, which compared to the prior year’s figure, has become less negative. Since these figures may be relatively short-term thinking, I’ve calculated an annualized five-year value for TRM’s earnings, which stands at -AU$82.72K. This means that, although net income is negative, it has become less negative over the years.

We can further analyze Truscott Mining’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Truscott Mining has seen an annual decline in revenue of -27.64%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the Australian metals and mining industry has been growing its average earnings by double-digit 15.35% over the past year, and 12.96% over the previous five years. This means that, despite the fact that Truscott Mining is presently loss-making, it may have been aided by industry tailwinds, moving earnings towards to right direction.

What does this mean?

Truscott Mining’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 valuable step is to examine company-specific issues Truscott Mining may be facing and whether management guidance has consistently been met in the past. You should continue to research Truscott Mining to get a more holistic view of the stock by looking at: