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Assessing Surefire Resources NL’s (ASX:SRN) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess SRN’s recent performance announced on 31 December 2017 and evaluate these figures to its long-term trend and industry movements. See our latest analysis for Surefire Resources
Were SRN’s earnings stronger than its past performances and the industry?
I prefer to use the ‘latest twelve-month’ data, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This technique enables me to analyze different stocks on a similar basis, using the most relevant data points. For Surefire Resources, its latest trailing-twelve-month earnings is -AU$611.01K, which, relative to the previous year’s level, has become less negative. Given that these figures may be relatively short-term, I have created an annualized five-year figure for Surefire Resources’s earnings, which stands at -AU$920.56K. This means that, despite the fact that net income is negative, it has become less negative over the years.
We can further examine Surefire Resources’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Surefire Resources has seen an annual decline in revenue of -30.27%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Eyeballing growth from a sector-level, the Australian metals and mining industry has been growing its average earnings by double-digit 17.02% over the past year, and 13.22% over the past five years. This shows that, despite the fact that Surefire Resources is presently running a loss, it may have gained from industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Surefire Resources’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 predict what will happen in the future and when. The most insightful step is to assess company-specific issues Surefire Resources may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Surefire Resources to get a more holistic view of the stock by looking at: