When Fraser Range Metals Group Limited (ASX:FRN) released its most recent earnings update (31 December 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Understanding how Fraser Range Metals Group performed requires a benchmark rather than trying to assess a standalone number at one point in time. Below is a quick commentary on how I see FRN has performed. Check out our latest analysis for Fraser Range Metals Group
Did FRN’s recent earnings growth beat the long-term trend and the industry?
I look at 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 technique enables me to assess different companies on a more comparable basis, using the most relevant data points. For Fraser Range Metals Group, its latest earnings (trailing twelve month) is -AU$388.46K, which compared to last year’s figure, has become less negative. Given that these values may be relatively myopic, I have computed an annualized five-year value for Fraser Range Metals Group’s earnings, which stands at -AU$373.86K. This means Fraser Range Metals Group has historically performed better than recently, while it seems like earnings are now heading back towards to right direction again.
We can further examine Fraser Range Metals Group’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Fraser Range Metals Group has seen an annual decline in revenue of -32.44%, 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 15.45% in the prior twelve months, and 13.17% over the past five. This means that whatever tailwind the industry is benefiting from, Fraser Range Metals Group has not been able to gain as much as its average peer.
What does this mean?
Fraser Range Metals Group’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 assess company-specific issues Fraser Range Metals Group may be facing and whether management guidance has steadily been met in the past. You should continue to research Fraser Range Metals Group to get a better picture of the stock by looking at: