Examining Tengasco Inc’s (AMEX:TGC) 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 TGC’s latest performance announced on 31 March 2018 and compare these figures to its longer term trend and industry movements. See our latest analysis for Tengasco
Could TGC beat the long-term trend and outperform its industry?
To account for any quarterly or half-yearly updates, I 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 enables me to assess different stocks on a similar basis, using the latest information. For Tengasco, its latest earnings (trailing twelve month) is -US$271.00K, which, relative to the prior year’s figure, has become less negative. Since these values may be fairly short-term thinking, I’ve determined an annualized five-year value for TGC’s earnings, which stands at -US$2.80M. This shows that, despite the fact that net income is negative, it has become less negative over the years.
We can further examine Tengasco’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years Tengasco has seen an annual decline in revenue of -21.80%, 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 US oil and gas industry has been growing its average earnings by double-digit 25.00% in the prior year, . This is a change from a volatile drop of -5.41% in the last couple of years. This means that, despite the fact that Tengasco is currently loss-making, it may have only just benefited from the recent industry expansion, moving earnings towards to right direction.
What does this mean?
Tengasco’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 envisage what will occur going forward, and when. The most valuable step is to examine company-specific issues Tengasco may be facing and whether management guidance has regularly been met in the past. I suggest you continue to research Tengasco to get a more holistic view of the stock by looking at:
- Financial Health: Is TGC’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.
- Valuation: What is TGC 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 TGC is currently mispriced by the market.
- 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 trailing twelve months from 31 March 2018. 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.