Measuring Comet Ridge Limited’s (ASX:COI) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess COI’s recent performance announced on 30 June 2017 and weigh these figures against its long-term trend and industry movements. Check out our latest analysis for Comet Ridge
Commentary On COI’s Past Performance
I like to use 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 method enables me to examine different companies on a more comparable basis, using the most relevant data points. For Comet Ridge, the most recent twelve-month earnings -A$3.6M, which compared to the previous year’s level, has become less negative. Since these figures are somewhat short-term, I’ve created an annualized five-year value for COI’s net income, which stands at -A$6.2M. This suggests that, even though net income is negative, it has become less negative over the years.
Additionally, we can analyze Comet Ridge’s loss by looking at what’s going on in the industry as well as within the company. Firstly, I want to quickly look into the line items. Revenue growth over past couple of years has been negative at -53.59%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Viewing growth from a sector-level, the Australian oil and gas industry has been enduring some headwinds over the previous twelve months, leading to an average earnings drop of -25.18%. This is a momentous change, given that the industry has constantly been delivering a a notable growth of 28.17% in the past couple of years. This suggests that whatever recent headwind the industry is experiencing, Comet Ridge is relatively better-cushioned than its peers.
What does this mean?
Though Comet Ridge’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always difficult to predict what will occur going forward, and when. The most insightful step is to examine company-specific issues Comet Ridge may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Comet Ridge to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for COI’s future growth? Take a look at our free research report of analyst consensus for COI’s outlook.