Want To Invest In New Zealand Oil & Gas Limited (NZE:NZO)? Here’s How It Performed Lately
Increase in profitability and industry-beating performance can be essential considerations in a stock for some investors. In this article, I will take a look at New Zealand Oil & Gas Limited’s (NZSE:NZO) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. See our latest analysis for New Zealand Oil & Gas
Commentary On NZO’s Past Performance
I look at 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 method enables me to assess many different companies on a similar basis, using the latest information. For New Zealand Oil & Gas, its most recent earnings (trailing twelve month) is -NZ$22.61M, which, relative to the prior year’s level, has become more negative. Since these values may be relatively short-term thinking, I’ve calculated an annualized five-year value for NZO’s earnings, which stands at -NZ$4.81M. This doesn’t look much better, as earnings seem to have consistently been getting more and more negative over time.
We can further analyze New Zealand Oil & Gas’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years New Zealand Oil & Gas has seen an annual decline in revenue of -5.09%, on average. This adverse movement is a driver of the company’s inability to reach breakeven. Has the entire industry experienced this headwind? Looking at growth from a sector-level, the NZ oil and gas industry has been growing its average earnings by double-digit 29.02% over the past year, . This is a turnaround from a volatile drop of -5.16% in the last couple of years. This suggests that whatever tailwind the industry is benefiting from, New Zealand Oil & Gas has not been able to gain as much as its industry peers.
What does this mean?
New Zealand Oil & Gas’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that incur net loss is always difficult to predict what will happen in the future and when. The most insightful step is to examine company-specific issues New Zealand Oil & Gas may be facing and whether management guidance has regularly been met in the past. You should continue to research New Zealand Oil & Gas to get a better picture of the stock by looking at:
1. Financial Health: Is NZO’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. 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 June 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.
