When Compañía de Minas Buenaventura SAA (NYSE:BVN) announced its most recent earnings (30 September 2017), I did two things: looked at its past earnings track record, then look at what is happening in the industry. Understanding how Compañía de Minas BuenaventuraA 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 BVN has performed. See our latest analysis for Compañía de Minas BuenaventuraA
Was BVN’s recent earnings decline indicative of a tough track record?
To account for any quarterly or half-yearly updates, 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 examine many different companies on a more comparable basis, using the latest information. For Compañía de Minas BuenaventuraA, its most recent twelve-month earnings is -$342.8M, which, against the prior year’s level, has become more negative. Given that these values may be relatively myopic, I’ve computed an annualized five-year figure for BVN’s earnings, which stands at $199.3M.
Additionally, we can evaluate Compañía de Minas BuenaventuraA’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to briefly look into the line items. Revenue growth over the last few years has been negative at -6.26%. The key to profitability here is to make sure the company’s cost growth is well-controlled. Looking at growth from a sector-level, the US metals and mining industry has been growing its average earnings by double-digit 38.36% over the prior year, and a flatter -0.60% over the previous few years. This suggests that whatever tailwind the industry is enjoying, Compañía de Minas BuenaventuraA has not been able to reap as much as its average peer.
What does this mean?
Though Compañía de Minas BuenaventuraA’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most valuable step is to examine company-specific issues Compañía de Minas BuenaventuraA may be facing and whether management guidance has dependably been met in the past. You should continue to research Compañía de Minas BuenaventuraA to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for BVN’s future growth? Take a look at our free research report of analyst consensus for BVN’s outlook.