Measuring Sabre Resources Limited’s (ASX:SBR) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess SBR’s recent performance announced on 30 June 2017 and weigh these figures against its long-term trend and industry movements. See our latest analysis for SBR
How Well Did SBR Perform?
I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to analyze different companies in a uniform manner using new information. For Sabre Resources, the most recent twelve-month earnings -A$1M, which, against last year’s level, has become more negative. Given that these figures are relatively myopic, I’ve computed an annualized five-year figure for Sabre Resources’s net income, which stands at -A$1M. This doesn’t look much better, since earnings seem to have consistently been getting more and more negative over time.
Additionally, we can evaluate Sabre Resources’s loss by researching what’s going on in the industry on top of within the company. Firstly, I want to briefly look into the line items. Revenue growth over last couple of years has grown by a mere 3.41%. Given that top-line growth is also pretty stale the key to profitability in the future would be managing cost growth rates. Eyeballing growth from a sector-level, the Australian metals and mining industry has been growing, albeit, at a unexciting single-digit rate of 6.76% in the previous twelve months, and a substantial 11.86% over the previous few years. This shows that any tailwind the industry is benefiting from, Sabre Resources has not been able to leverage it as much as its industry peers.
What does this mean?
Sabre 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 forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Sabre Resources may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Sabre Resources to get a better picture of the stock by looking at:
1. Financial Health: Is SBR’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.