Has China Goldcorp Ltd’s (CVE:CAU.H) Improved Earnings Growth In Recent Times?
Measuring China Goldcorp Ltd’s (TSXV:CAU.H) track record of past performance is an insightful exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a powerful signal for future performance. Below, I will assess CAU.H’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. View our latest analysis for China Goldcorp
Despite a decline, did CAU.H underperform the long-term trend and the industry?
I like to use the ‘latest twelve-month’ data, 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 technique allows me to assess different companies in a uniform manner using new information. For China Goldcorp, its latest trailing-twelve-month earnings is -CA$30.31K, which, relative to the previous year’s figure, has become more negative. Since these values are relatively nearsighted, I’ve calculated an annualized five-year figure for CAU.H’s earnings, which stands at -CA$42.05K. This suggests that, even though net income is negative, it has become less negative over the years.
We can further examine China Goldcorp’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade China Goldcorp’s revenue growth has been fairly muted, with an annual growth rate of -0.0084%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Scanning growth from a sector-level, the Canadian capital markets industry has been enduring some headwinds over the prior year, leading to an average earnings drop of -3.14%. This is a significant change, given that the industry has constantly been delivering a a robust growth of 15.94% in the previous five years. This suggests that although China Goldcorp is currently unprofitable, any near-term headwind the industry is enduring, China Goldcorp is relatively better-cushioned than its peers.
What does this mean?
China Goldcorp’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 difficult to envisage what will happen in the future and when. The most insightful step is to examine company-specific issues China Goldcorp may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research China Goldcorp to get a more holistic view of the stock by looking at the areas below. Just a heads up – to access some parts of the Simply Wall St research tool you might be asked to create a free account, but it takes just one click and the information they provide is definitely worth it in my opinion.
1. Financial Health: Is CAU.H’s operations financially sustainable? Balance sheets can be hard to analyze, which is why Simply Wall St does it for you. Check out important financial health checks here.
2. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore a free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 September 2017. 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.
