Measuring Golden Minerals Company’s (AMEX:AUMN) 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 AUMN’s recent performance announced on 30 September 2017 and compare these figures to its historical trend and industry movements. See our latest analysis for Golden Minerals
How Well Did AUMN Perform?
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 enables me to examine different companies on a more comparable basis, using the latest information. For Golden Minerals, its most recent earnings (trailing twelve month) is -US$1.54M, which, relative to last year’s figure, has become less negative. Given that these figures are somewhat short-term, I’ve created an annualized five-year value for Golden Minerals’s earnings, which stands at -US$69.08M. This shows that, despite the fact that net income is negative, it has become less negative over the years.
We can further assess Golden Minerals’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Golden Minerals has seen an annual decline in revenue of -9.51%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Inspecting growth from a sector-level, the US metals and mining industry has been ramping up average earnings growth of 53.76% over the past twelve months, and a flatter 0.53% over the past five. This means although Golden Minerals is currently running a loss, it may have been aided by industry tailwinds, moving earnings in the right direction.
What does this mean?
While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will occur going forward, and when. The most useful step is to assess company-specific issues Golden Minerals may be facing and whether management guidance has regularly been met in the past. I recommend you continue to research Golden Minerals to get a better picture of the stock by looking at:
- 1. Financial Health: Is AUMN’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 AUMN 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 AUMN 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 trailing twelve months from 30 September 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.