Want To Invest In Santacruz Silver Mining Ltd (TSXV:SCZ)? Here’s How It Performed Lately
When Santacruz Silver Mining Ltd (TSXV:SCZ) released its most recent earnings update (30 September 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Santacruz Silver Mining’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not SCZ actually performed well. Below is a quick commentary on how I see SCZ has performed. View our latest analysis for Santacruz Silver Mining
Could SCZ beat the long-term trend and outperform its industry?
For the purpose of this commentary, I like to 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 blend enables me to examine many different companies on a more comparable basis, using the most relevant data points. For Santacruz Silver Mining, the most recent twelve-month earnings -$17M, which, against the prior year’s level, has become less negative. Given that these figures may be fairly short-term thinking, I have computed an annualized five-year figure for SCZ’s earnings, which stands at -$13M. This means Santacruz Silver Mining has historically performed better than recently, while it seems like earnings are now heading back towards to right direction again.
We can further examine Santacruz Silver Mining’s loss by researching what’s going on in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over past few years has increased by 17.70%, signalling that Santacruz Silver Mining is in a high-growth period with expenses racing ahead elevated top-line growth rates. Scanning growth from a sector-level, the Canadian metals and mining industry has been increasing average earnings growth of 60.80% over the prior year, and a strong 11.97% over the previous five years. This shows that whatever uplift the industry is profiting from, Santacruz Silver Mining has not been able to gain as much as its industry peers.
What does this mean?
Though Santacruz Silver Mining’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 forecast what will happen in the future and when. The most insightful step is to assess company-specific issues Santacruz Silver Mining may be facing and whether management guidance has regularly been met in the past. You should continue to research Santacruz Silver Mining to get a more holistic view of the stock by looking at:
1. Financial Health: Is SCZ’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 SCZ 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 SCZ 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.
