For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Cameco Corporation (TSX:CCO) useful as an attempt to give more color around how Cameco is currently performing. Check out our latest analysis for Cameco
Commentary On CCO’s Past Performance
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 allows me to assess various companies on a similar basis, using new information. For Cameco, its latest trailing-twelve-month earnings is -CA$132.09M, which compared to the prior year’s level, has become less negative. Given that these figures are relatively short-term, I’ve estimated an annualized five-year figure for Cameco’s earnings, which stands at CA$139.05M.We can further analyze Cameco’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Cameco’s top-line has increased by a mere 2.16%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Looking at growth from a sector-level, the Canadian oil and gas industry has been ramping up average earnings growth of 57.96% over the prior twelve months, and a flatter 0.43% over the past five years. This means any uplift the industry is enjoying, Cameco has not been able to realize the gains unlike its industry peers.
What does this mean?
Though Cameco’s past data is helpful, it is only one aspect of my investment thesis. Companies that incur net loss is always hard to forecast what will occur going forward, and when. The most useful step is to examine company-specific issues Cameco may be facing and whether management guidance has dependably been met in the past. I recommend you continue to research Cameco to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CCO’s future growth? Take a look at our free research report of analyst consensus for CCO’s outlook.
- Financial Health: Is CCO’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.