In this commentary, I will examine Antilles Oil and Gas NL’s (ASX:AVD) latest earnings update (30 June 2017) and compare these figures against its performance over the past couple of years, as well as how the rest of the oil, gas and consumable fuels industry performed. As an investor, I find it beneficial to assess AVD’s trend over the short-to-medium term in order to gauge whether or not the company is able to meet its goals, and ultimately sustainably grow over time. Check out our latest analysis for Antilles Oil and Gas NL

Did AVD’s recent EPS Growth beat the long-term trend and the industry?

I look at 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 examine different stocks in a uniform manner using the most relevant data points. For Antilles Oil and Gas NL, the most recent earnings -A$2M, which compared to the prior year’s level, has become less negative. Since these figures are fairly short-term, I’ve estimated an annualized five-year figure for AVD’s net income, which stands at -A$2M. This suggests that, while net income is negative, it has become less negative over the years.

We can further evaluate Antilles Oil and Gas NL’s loss by looking at what has been happening in the industry on top of within the company. Initially, I want to quickly look into the line items. Revenue growth over past couple of years has increased by 64.23%, implying that Antilles Oil and Gas NL is in a high-growth period with expenses shooting ahead of elevated top-line growth rates. Scanning growth from a sector-level, the Australian oil, gas and consumable fuels industry has been ramping up average earnings growth of 57.50% in the previous twelve months, and a less exciting 3.66% over the past couple of years. This means whatever uplift the industry is enjoying, Antilles Oil and Gas NL has not been able to reap as much as its average peer.

What does this mean?

Antilles Oil and Gas NL’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always hard to predict what will happen in the future and when. The most insightful step is to assess company-specific issues Antilles Oil and Gas NL may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Antilles Oil and Gas NL to get a more holistic view of the stock by looking at:

1. Financial Health: Is AVD’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. Valuation: What is AVD worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether AVD is currently mispriced by the market.

3. 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.