Analyzing Aorere Resources Limited’s (NZSE:AOR) 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 AOR’s recent performance announced on 30 September 2017 and compare these figures to its long-term trend and industry movements. View our latest analysis for Aorere Resources
Commentary On AOR’s Past Performance
I look at 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 blend enables me to examine different companies on a similar basis, using the most relevant data points. For Aorere Resources, its most recent earnings (trailing twelve month) is -NZ$536.00K, which, relative to the previous year’s level, has become less negative. Since these figures are relatively short-term, I have computed an annualized five-year value for AOR’s earnings, which stands at -NZ$779.36K. This means that, even though net income is negative, it has become less negative over the years.
We can further assess Aorere Resources’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Aorere Resources has seen an annual decline in revenue of -20.63%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Viewing growth from a sector-level, the NZ capital markets industry has been growing its average earnings by double-digit 36.12% in the prior year, and a more subdued 3.04% over the past five years. This shows that, although Aorere Resources is currently unprofitable, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Though Aorere Resources’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Aorere Resources may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Aorere Resources to get a better picture of the stock by looking at:
-
Financial Health: Is AOR’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.
-
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 30 September 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.