Assessing Sumatra Copper & Gold plc’s (ASX:SUM) past track record of performance is a useful exercise for investors. It allows us to understand whether the company has met or exceed expectations, which is a great indicator for future performance. Below, I assess SUM’s latest performance announced on 30 June 2017 and evaluate these figures to its historical trend and industry movements. View our latest analysis for Sumatra Copper & Gold
Were SUM’s earnings stronger than its past performances and the industry?
For the purpose of this commentary, I like to use data from the most recent 12 months, 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 blend allows me to analyze different companies on a similar basis, using the most relevant data points. Sumatra Copper & Gold’s latest twelve-month earnings -$32.0M, which, against the prior year’s figure, has become less negative. Given that these values are relatively nearsighted, I’ve estimated an annualized five-year value for Sumatra Copper & Gold’s earnings, which stands at -$16.2M. This shows that, Sumatra Copper & Gold has historically performed better than recently, while it seems like earnings are now heading back towards to right direction again.
Additionally, we can assess Sumatra Copper & Gold’s loss by researching what has been happening in the industry as well as within the company. First, I want to briefly look into the line items. Revenue growth over last few years has rose by 89.51%, implying that Sumatra Copper & Gold is in a high-growth phase with expenses shooting ahead of high top-line growth rates. Scanning growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a subdued single-digit rate of 6.76% in the prior twelve months, and a substantial 11.62% over the previous five years. This means even though Sumatra Copper & Gold is currently running a loss, it may have benefited from industry tailwinds, moving earnings towards to right direction.
What does this mean?
Though Sumatra Copper & Gold’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most valuable step is to examine company-specific issues Sumatra Copper & Gold may be facing and whether management guidance has dependably been met in the past. You should continue to research Sumatra Copper & Gold to get a better picture of the stock by looking at: