When Bulletin Resources Limited (ASX:BNR) announced its most recent earnings (30 June 2017), I compared it against two factor: its historical earnings track record, and the performance of its industry peers on average. Being able to interpret how well Bulletin Resources has done so far requires weighing its performance against a benchmark, rather than looking at a standalone number at a point in time. In this article, I’ve summarized the key takeaways on how I see BNR has performed. Check out our latest analysis for Bulletin Resources
Did BNR beat its long-term earnings growth trend and its industry?
I use data from the most recent 12 months, 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 enables me to assess many different companies on a similar basis, using the most relevant data points. For Bulletin Resources, its most recent earnings is -A$0.1M, which, relative to last year’s level, has become less negative. Given that these figures are somewhat nearsighted, I have estimated an annualized five-year value for BNR’s earnings, which stands at -A$1.1M. This suggests that, although net income is negative, it has become less negative over the years.
We can further analyze Bulletin Resources’s loss by researching what’s going on in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last couple of years has been fairly unexciting, remaining flat on average at -1.47%. Given that top-line growth is also pretty flat, the key to profitability in the future would be controlling costs. Looking at growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 7.36% in the prior year, and 8.50% over the past couple of years. This means though Bulletin Resources is presently unprofitable, it may have gained from industry tailwinds, moving earnings in the right direction.
What does this mean?
Bulletin Resources’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 difficult to forecast what will occur going forward, and when. The most insightful step is to examine company-specific issues Bulletin Resources may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Bulletin Resources to get a more holistic view of the stock by looking at: