Measuring Samson Oil & Gas Limited’s (ASX:SSN) 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 SSN’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. Check out our latest analysis for Samson Oil & Gas
Did SSN beat its long-term earnings growth trend and its industry?
To account for any quarterly or half-yearly updates, I use data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to examine different stocks on a more comparable basis, using new information. For Samson Oil & Gas, the most recent earnings -$4.0M, which compared to last year’s figure, has become less negative. Since these figures may be somewhat myopic, I have determined an annualized five-year value for Samson Oil & Gas’s earnings, which stands at -$11.2M. This shows that, while net income is negative, it has become less negative over the years.
We can further examine Samson Oil & Gas’s loss by looking at 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 the past couple of years has risen by 12.84%, implying that Samson Oil & Gas is in a high-growth phase with expenses shooting ahead of elevated top-line growth rates. Scanning growth from a sector-level, the Australian oil and gas industry has been enduring some headwinds over the prior twelve months, leading to an average earnings drop of -25.18%. This is a significant change, given that the industry has constantly been delivering a a strong growth of 28.17% in the past couple of years. This shows that any recent headwind the industry is facing, Samson Oil & Gas is relatively better-cushioned than its peers.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Companies that incur net loss is always hard to predict what will occur going forward, and when. The most valuable step is to assess company-specific issues Samson Oil & Gas may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research Samson Oil & Gas to get a more holistic view of the stock by looking at:
1. Financial Health: Is SSN’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. Valuation: What is SSN 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 SSN is currently mispriced by the market.
3. 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.