In this article, I will take a look at Global Fortune Investment Limited’s (ASX:GFI) most recent earnings update (31 December 2017) and compare these latest figures against its performance over the past few years, along with how the rest of GFI’s industry performed. As a long-term investor, I find it useful to analyze the company’s trend over time in order to estimate whether or not the company is able to meet its goals, and eventually grow sustainably over time. View our latest analysis for Global Fortune Investment
How Did GFI’s Recent Performance Stack Up Against Its Past?
For the most up-to-date info, I use data from the most recent 12 months, 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 technique allows me to analyze different stocks on a more comparable basis, using the most relevant data points. For Global Fortune Investment, its latest trailing-twelve-month earnings is -AU$837.04K, which, against the previous year’s level, has become less negative. Given that these values are relatively short-term, I’ve determined an annualized five-year value for Global Fortune Investment’s net income, which stands at -AU$824.44K. This means Global Fortune Investment has historically performed better than recently, even though it seems like earnings are now heading back in the right direction again.We can further evaluate Global Fortune Investment’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past five years Global Fortune Investment’s top-line has increased by 69.54% on average, implying that the company is in a high-growth period with expenses racing ahead revenues, leading to annual losses. Viewing growth from a sector-level, the Australian metals and mining industry has been growing its average earnings by double-digit 18.18% in the previous year, and a less exciting 8.68% over the past half a decade. This shows that, even though Global Fortune Investment is presently loss-making, it may have been aided by industry tailwinds, moving earnings into a more favorable position.
What does this mean?
Global Fortune Investment’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 assess company-specific issues Global Fortune Investment may be facing and whether management guidance has consistently been met in the past. I recommend you continue to research Global Fortune Investment to get a more holistic view of the stock by looking at:
- Financial Health: Is GFI’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.
- 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.