Analyzing Ikwezi Mining Limited’s (ASX:IKW) track record of past performance is a valuable exercise for investors. It enables us to reflect on whether or not the company has met expectations, which is a powerful signal for future performance. Today I will assess IKW’s recent performance announced on 31 December 2017 and compare these figures to its long-term trend and industry movements. Check out our latest analysis for Ikwezi Mining
How Did IKW’s Recent Performance Stack Up Against Its Past?
To account for any quarterly or half-yearly updates, I use the ‘latest twelve-month’ data, 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 method enables me to analyze many different companies in a uniform manner using the latest information. For Ikwezi Mining, its latest trailing-twelve-month earnings is -AU$259.94K, which compared to the previous year’s level, has become more negative. Given that these figures are somewhat myopic, I have computed an annualized five-year value for Ikwezi Mining’s net income, which stands at -AU$1.88M. This suggests that, even though net income is negative, it has become less negative over the years.We can further evaluate Ikwezi Mining’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Ikwezi Mining’s top-line has risen by 28.78% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses. Looking at growth from a sector-level, the Australian oil and gas industry has been increasing growth, more than doubling average earnings over the prior year, and a notable 12.72% over the past five. This shows that any tailwind the industry is deriving benefit from, Ikwezi Mining has not been able to leverage it as much as its industry peers.
What does this mean?
Ikwezi Mining’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 hard to envisage what will happen in the future and when. The most insightful step is to assess company-specific issues Ikwezi Mining may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Ikwezi Mining to get a better picture of the stock by looking at:
- 1. Financial Health: Is IKW’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.