After looking at Camber Energy Inc’s (AMEX:CEI) latest earnings update (31 December 2017), I found it helpful to revisit the company’s performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. See our latest analysis for Camber Energy
Did CEI’s recent earnings growth beat the long-term trend and the industry?
To account for any quarterly or half-yearly updates, 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 blend enables me to assess many different companies on a similar basis, using the latest information. For Camber Energy, its most recent trailing-twelve-month earnings is -US$50.94M, which compared to the previous year’s figure, has become less negative. Since these figures are relatively myopic, I have estimated an annualized five-year figure for Camber Energy’s net income, which stands at -US$60.38M. This shows that, although net income is negative, it has become less negative over the years.
We can further assess Camber Energy’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Camber Energy’s top-line more than doubled on average, signalling that the business is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Inspecting growth from a sector-level, the US oil and gas industry has been growing its average earnings by double-digit 24.90% in the previous twelve months, . This is a turnaround from a volatile drop of -8.32% in the last few years. This means though Camber Energy is presently loss-making, it may have only just gained from the recent industry expansion, moving earnings into a more favorable position.
What does this mean?
Camber Energy’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 forecast what will happen in the future and when. The most useful step is to assess company-specific issues Camber Energy may be facing and whether management guidance has steadily been met in the past. I recommend you continue to research Camber Energy to get a better picture of the stock by looking at:
- 1. Financial Health: Is CEI’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 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.