For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on KIN Mining NL (ASX:KIN) useful as an attempt to give more color around how KIN Mining is currently performing. View our latest analysis for KIN Mining
How Did KIN’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I 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 allows me to assess various companies on a more comparable basis, using the most relevant data points. KIN Mining’s most recent earnings -A$2.4M, which, in comparison to the previous year’s level, has become more negative. Since these figures may be somewhat short-term thinking, I have created an annualized five-year value for KIN’s net income, which stands at -A$0.9M. This doesn’t seem to paint a better picture, as earnings seem to have consistently been getting more and more negative over time.
Additionally, we can examine KIN Mining’s loss by researching what has been happening in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over the last couple of years has been negative at -40.29%. The key to profitability here is to make sure the company’s cost growth is well-managed. Viewing growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a subdued single-digit rate of 7.36% over the previous year, and 8.50% over the past five. This shows that any uplift the industry is deriving benefit from, KIN Mining has not been able to reap as much as its industry peers.
What does this mean?
KIN Mining’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 hard to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues KIN Mining may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research KIN Mining to get a better picture of the stock by looking at:
1. Financial Health: Is KIN’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.