Assessing Sumatra Copper & Gold plc’s (ASX:SUM) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess SUM’s recent performance announced on 30 June 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Sumatra Copper & Gold
How Well Did SUM Perform?
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 enables me to assess different companies on a similar basis, using the latest information. For Sumatra Copper & Gold, its most recent trailing-twelve-month earnings is -US$31.96M, which, in comparison to the previous year’s level, has become less negative. Since these figures are somewhat myopic, I’ve computed an annualized five-year value for Sumatra Copper & Gold’s earnings, which stands at -US$17.10M. This suggests that, Sumatra Copper & Gold has historically performed better than recently, despite the fact that it seems like earnings are now heading back towards to right direction again.
We can further analyze Sumatra Copper & Gold’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Sumatra Copper & Gold’s top-line has grown by 89.51% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Scanning growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a subdued single-digit rate of 8.07% over the prior year, and a substantial 13.69% over the last five years. This shows that, while Sumatra Copper & Gold is presently loss-making, it may have benefited from industry tailwinds, moving earnings in the right direction.
What does this mean?
Sumatra Copper & Gold’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 predict what will happen in the future and when. The most useful step is to examine company-specific issues Sumatra Copper & Gold may be facing and whether management guidance has regularly been met in the past. You should continue to research Sumatra Copper & Gold to get a better picture of the stock by looking at: