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 Argonaut Gold Inc (TSX:AR) useful as an attempt to give more color around how Argonaut Gold is currently performing. Check out our latest analysis for Argonaut Gold
Could AR beat the long-term trend and outperform its industry?
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 enables me to assess different companies in a uniform manner using the most relevant data points. For Argonaut Gold, its most recent trailing-twelve-month earnings is US$24.06M, which, against the prior year’s level, has increased by an impressive 98.74%. Given that these values may be fairly myopic, I have calculated an annualized five-year figure for Argonaut Gold’s earnings, which stands at -US$11.69M This suggests that, generally, Argonaut Gold has been able to increasingly grow its profits over the last couple of years as well.What’s enabled this growth? Let’s take a look at if it is only due to an industry uplift, or if Argonaut Gold has experienced some company-specific growth. In the past couple of years, Argonaut Gold top-line expansion has outpaced earnings and the growth rate of expenses. Though this resulted in a margin contraction, it has lessened Argonaut Gold’s earnings contraction. Inspecting growth from a sector-level, the Canadian metals and mining industry has been growing its average earnings by double-digit 27.16% over the previous year, and 14.40% over the past five. This means that whatever uplift the industry is benefiting from, Argonaut Gold is capable of amplifying this to its advantage.
What does this mean?
Argonaut Gold’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? You should continue to research Argonaut Gold to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for AR’s future growth? Take a look at our free research report of analyst consensus for AR’s outlook.
- Financial Health: Is AR’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.