Today I will take a look at Goldfields Money Limited’s (ASX:GMY) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the banks industry performed. As an investor, I find it beneficial to assess GMY’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Goldfields Money

How Well Did GMY Perform?

For the purpose of this commentary, I like to use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This method enables me to analyze many different companies on a similar basis, using new information. For Goldfields Money, its latest earnings (trailing twelve month) is -AU$301.73K, which, against the previous year’s level, has become less negative. Since these figures may be fairly nearsighted, I have computed an annualized five-year figure for GMY’s earnings, which stands at -AU$23.13K. This shows that, Goldfields Money has historically performed better than recently, although it seems like earnings are now heading back in the right direction again.

We can further examine Goldfields Money’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Goldfields Money’s top-line has risen by a mere 9.72%, 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 Australian banks industry has been growing, albeit, at a subdued single-digit rate of 5.20% over the previous year, and 4.44% over the past five. This means that, while Goldfields Money is presently unprofitable, it may have been aided by industry tailwinds, moving earnings towards to right direction.

What does this mean?

While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to envisage what will occur going forward, and when. The most useful step is to examine company-specific issues Goldfields Money may be facing and whether management guidance has steadily been met in the past. I suggest you continue to research Goldfields Money to get a more holistic view of the stock by looking at:

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

• 2. Financial Health: Is GMY’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.