Did Diamcor Mining Inc's (CVE:DMI) Recent Earnings Growth Beat The Trend?

After looking at Diamcor Mining Inc's (TSXV:DMI) latest earnings update (31 December 2017), I found it helpful to revisit the company's performance in the past couple of years and compare this against the latest numbers. As a long-term investor I tend to focus on earnings trend, rather than a single number at one point in time. Also, comparing it against an industry benchmark to understand whether it outperformed, or is simply riding an industry wave, is an important aspect. In this article I briefly touch on my key findings. View our latest analysis for Diamcor Mining

Did DMI's recent earnings growth beat the long-term trend and the industry?

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 blend allows me to analyze different stocks on a similar basis, using the most relevant data points. For Diamcor Mining, its most recent bottom-line (trailing twelve month) is -CA$2.69M, which, in comparison to the previous year's figure, has become less negative. Given that these values may be somewhat short-term, I have computed an annualized five-year value for Diamcor Mining's earnings, which stands at -CA$2.64M. This means that, Diamcor Mining has historically performed better than recently, although it seems like earnings are now heading back towards a more favorable position once more.

We can further analyze Diamcor Mining's loss by looking at what the industry has been experiencing over the past few years. Each year, for the past half a decade Diamcor Mining's top-line has risen by 30.40% on average, indicating 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 Canadian metals and mining industry has been growing its average earnings by double-digit 24.81% in the previous year, and 16.04% over the past five years. This suggests that whatever tailwind the industry is profiting from, Diamcor Mining has not been able to gain as much as its average peer.

What does this mean?

While past data is useful, it doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will happen in the future and when. The most valuable step is to assess company-specific issues Diamcor Mining may be facing and whether management guidance has dependably been met in the past. You should continue to research Diamcor Mining to get a more holistic view of the stock by looking at:

• 1. Financial Health: Is DMI’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.

NB: Figures in this article are calculated using data from the trailing twelve months from 31 December 2017. This may not be consistent with full year annual report figures.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.