When Globus Maritime Limited’s (NASDAQ:GLBS) announced its latest earnings (30 June 2017), I wanted to understand how these figures stacked up against its past performance. The two benchmarks I used were Globus Maritime’s average earnings over the past couple of years, and its industry performance. These are useful yardsticks to help me gauge whether or not GLBS actually performed well. Below is a quick commentary on how I see GLBS has performed. View our latest analysis for Globus Maritime
How GLBS fared against its long-term earnings performance and its industry
I use data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. This blend allows me to examine different stocks in a uniform manner using the latest information. For Globus Maritime, the latest earnings -$9.0M, which, in comparison to the prior year’s figure, has become less negative. Given that these values are fairly myopic, I have created an annualized five-year value for Globus Maritime’s earnings, which stands at -$16.0M. This suggests that, despite the fact that net income is negative, it has become less negative over the years.
We can further assess Globus Maritime’s loss by researching what has been happening in the industry as well as within the company. First, I want to quickly look into the line items. Revenue growth over past couple of years has been negative at -18.13%. The key to profitability here is to make sure the company’s cost growth is well-managed. Scanning growth from a sector-level, the US marine industry has been growing, albeit, at a unexciting single-digit rate of 4.28% over the previous year, and 2.87% over the past five years. This means that any near-term headwind the industry is enduring, Globus Maritime is less exposed compared to its peers.
What does this mean?
Globus Maritime’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to envisage what will happen in the future and when. The most useful step is to examine company-specific issues Globus Maritime may be facing and whether management guidance has dependably been met in the past. I suggest you continue to research Globus Maritime to get a better picture of the stock by looking at:
1. Financial Health: Is GLBS’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 GLBS 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 GLBS 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.