In this article, I will take a look at Petropavlovsk PLC’s (LON:POG) 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 POG’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. Check out our latest analysis for Petropavlovsk
How Did POG’s Recent Performance Stack Up Against Its Past?POG recently turned a profit of UK£42.38m (most recent trailing twelve-months) compared to its average loss of -UK£70.44m over the past five years.
In the past few years, though bottom-line growth has seen a decrease, top-line growth has dropped much faster, bringing about a margin expansion and Petropavlovsk still maintaining profitability. Looking at growth from a sector-level, the UK metals and mining industry has been growing its average earnings by double-digit 28.48% over the prior year, . This is a turnaround from a volatile drop of -3.88% in the last couple of years. This means that, in the recent industry expansion, Petropavlovsk has not been able to reap as much as its industry peers.In terms of returns from investment, Petropavlovsk has not invested its equity funds well, leading to a 7.16% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 4.66% is below the GB Metals and Mining industry of 6.26%, indicating Petropavlovsk’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Petropavlovsk’s debt level, has increased over the past 3 years from 1.13% to 5.76%.
What does this mean?
Though Petropavlovsk’s past data is helpful, it is only one aspect of my investment thesis. While Petropavlovsk has a good historical track record with positive growth and profitability, there’s no certainty that this will extrapolate into the future. I recommend you continue to research Petropavlovsk to get a more holistic view of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for POG’s future growth? Take a look at our free research report of analyst consensus for POG’s outlook.
- Financial Health: Is POG’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.