Assessing Golden Cross Resources Limited’s (ASX:GCR) past track record of performance is a valuable exercise for investors. It enables us to reflect on whether the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess GCR’s recent performance announced on 31 December 2017 and evaluate these figures to its longer term trend and industry movements. Check out our latest analysis for Golden Cross Resources
Commentary On GCR’s Past Performance
For the purpose of this commentary, I like to use the ‘latest twelve-month’ data, 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 examine many different companies on a more comparable basis, using the latest information. For Golden Cross Resources, its most recent bottom-line (trailing twelve month) is -AU$1.08M, which compared to the prior year’s figure, has become more negative. Since these values are somewhat nearsighted, I have created an annualized five-year value for GCR’s earnings, which stands at -AU$3.57M. This shows that, despite the fact that net income is negative, it has become less negative over the years.
We can further examine Golden Cross Resources’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Golden Cross Resources has seen an annual decline in revenue of -43.43%, 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 Australian metals and mining industry has been growing its average earnings by double-digit 18.18% in the past twelve months, and a more subdued 8.68% over the last five years. This means whatever uplift the industry is enjoying, Golden Cross Resources has not been able to leverage it as much as its average peer.
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 happen in the future and when. The most valuable step is to assess company-specific issues Golden Cross Resources may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Golden Cross Resources to get a better picture of the stock by looking at:
- Financial Health: Is GCR’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.
- 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 December 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.