Does BRS Resources Ltd’s (TSXV:BRS) Recent Track Record Look Strong?
For long-term investors, assessing earnings trend over time and against industry benchmarks is more beneficial than examining a single earnings announcement at a point in time. Investors may find my commentary, albeit very high-level and brief, on BRS Resources Ltd (TSXV:BRS) useful as an attempt to give more color around how BRS Resources is currently performing. Check out our latest analysis for BRS Resources
How Well Did BRS Perform?
To account for any quarterly or half-yearly updates, 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 enables me to analyze different stocks in a uniform manner using the most relevant data points. BRS Resources’s most recent earnings -CA$0.9M, which, in comparison to last year’s figure, has become less negative. Since these values are relatively nearsighted, I’ve computed an annualized five-year value for BRS Resources’s earnings, which stands at -CA$2.4M. This means that, while net income is negative, it has become less negative over the years.
We can further analyze BRS Resources’s loss by researching what’s going on in the industry as well as within the company. Initially, I want to quickly look into the line items. Revenue growth over last couple of years has been negative at -2.37%. The key to profitability here is to make sure the company’s cost growth is well-managed. Eyeballing growth from a sector-level, the Canadian oil, gas and consumable fuels industry has been growing its average earnings by double-digit 11.17% in the previous year, and a flatter 0.38% over the previous few years. This means that, while BRS Resources is currently running a loss, it may have gained from industry tailwinds, moving earnings in the right direction.
What does this mean?
Though BRS Resources’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most useful step is to assess company-specific issues BRS Resources may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research BRS Resources to get a more holistic view of the stock by looking at:
1. Financial Health: Is BRS’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.
