Today I will take a look at Artemis Resources Limited’s (ASX:ARV) most recent earnings update (30 June 2017) and compare these latest figures against its performance over the past few years, as well as how the rest of the metals and mining industry performed. As an investor, I find it beneficial to assess ARV’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. See our latest analysis for Artemis Resources

Could ARV beat the long-term trend and outperform its industry?

For the most up-to-date info, I use the ‘latest twelve-month’ data, 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 blend enables me to analyze different companies in a uniform manner using the latest information. For Artemis Resources, its latest trailing-twelve-month earnings is -AU$2.18M, which compared to last year’s level, has become less negative. Given that these values may be fairly myopic, I’ve determined an annualized five-year value for ARV’s earnings, which stands at -AU$3.05M. This suggests that, while net income is negative, it has become less negative over the years.

We can further analyze Artemis Resources’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Artemis Resources’s top-line has risen by 13.76% on average, indicating that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Inspecting growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a muted single-digit rate of 8.07% in the past year, and a substantial 13.69% over the past five. This means that, while Artemis Resources is currently unprofitable, it may have benefited from industry tailwinds, moving earnings into a more favorable position.

What does this mean?

Though Artemis Resources’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Artemis Resources may be facing and whether management guidance has regularly been met in the past. You should continue to research Artemis Resources to get a better picture of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.