King Island Scheelite Limited’s (ASX:KIS) Earnings Dropped -15.82%, How Did It Fare Against The Industry?
After reading King Island Scheelite Limited’s (ASX:KIS) most recent earnings announcement (31 December 2017), I found it useful to look back at how the company has performed in the past and compare this against the latest numbers. As a long term investor, I pay close attention to earnings trend, rather than the figures published at one point in time. I also compare against an industry benchmark to check whether King Island Scheelite’s performance has been impacted by industry movements. In this article I briefly touch on my key findings. See our latest analysis for King Island Scheelite
Commentary On KIS’s Past Performance
I prefer 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 method enables me to analyze various companies in a uniform manner using the latest information. For King Island Scheelite, its most recent earnings (trailing twelve month) is -AU$948.98K, which, against the previous year’s figure, has become more negative. Since these values are relatively short-term, I’ve estimated an annualized five-year value for KIS’s net income, which stands at -AU$1.81M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.
We can further examine King Island Scheelite’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade King Island Scheelite’s top-line has risen by a mere 7.11%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at 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 past five years. This suggests that whatever tailwind the industry is enjoying, King Island Scheelite has not been able to reap as much as its average peer.
What does this mean?
Though King Island Scheelite’s past data is helpful, it is only one aspect of my investment thesis. With companies that are currently loss-making, it is always hard to forecast what will happen in the future and when. The most insightful step is to examine company-specific issues King Island Scheelite may be facing and whether management guidance has consistently been met in the past. I suggest you continue to research King Island Scheelite to get a better picture of the stock by looking at:
Financial Health: Is KIS’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.
