Improvement in profitability and outperformance against the industry can be important characteristics in a stock for some investors. Below, I will assess TNG Limited’s (ASX:TNG) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. View our latest analysis for TNG
How Did TNG’s Recent Performance Stack Up Against Its Past?
I look at 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 technique enables me to assess various companies in a uniform manner using new information. TNG’s most recent earnings -A$4.4M, which, in comparison to last year’s figure, has become less negative. Since these figures are relatively nearsighted, I have created an annualized five-year value for TNG’s net income, which stands at -A$4.5M. This suggests that, although net income is negative, it has become less negative over the years.
We can further assess TNG’s loss by looking at what’s going on in the industry along with within the company. Firstly, I want to quickly look into the line items. Revenue growth over past few years has increased by 43.73%, indicating that TNG is in a high-growth phase with expenses shooting ahead of elevated top-line growth rates. Scanning growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 6.76% over the prior year, and a substantial 10.06% over the past five. This means although TNG is presently unprofitable, it may have benefited from industry tailwinds, moving earnings in the right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to envisage what will happen in the future and when. The most valuable step is to assess company-specific issues TNG may be facing and whether management guidance has dependably been met in the past. You should continue to research TNG to get a better picture of the stock by looking at:
1. Financial Health: Is TNG’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.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.