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For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at Gaming Innovation Group Inc’s (OB:GIG) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for Gaming Innovation Group

Did GIG perform worse than its track record and industry?

I like to 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 method allows me to analyze different companies in a uniform manner using the most relevant data points. For Gaming Innovation Group, its latest earnings (trailing twelve month) is -€417.50K, which compared to last year’s level, has turned from positive to negative. Since these figures may be fairly nearsighted, I have calculated an annualized five-year value for Gaming Innovation Group’s earnings, which stands at -€677.95K. This means while net income is negative, it has become less negative over the years.

We can further analyze Gaming Innovation 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 Gaming Innovation Group’s top-line has increased by 82.68% on average, indicating that the company is in a high-growth period with expenses shooting ahead of revenues, leading to annual losses. Eyeballing growth from a sector-level, the NO internet industry has been growing its average earnings by double-digit 15.14% in the prior year, and 18.62% over the past five. This shows that whatever tailwind the industry is deriving benefit from, Gaming Innovation Group has not been able to realize the gains unlike its average peer.

What does this mean?

Though Gaming Innovation Group’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Gaming Innovation Group may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Gaming Innovation Group to get a better picture of the stock by looking at:

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

• 2. Financial Health: Is GIG’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.