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Fundamental analysis: American Resources Corporation (AREC)

Awarener score: 3.6

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.5

• Business has been growing at an extremely fast pace. It's been top tier when measured against peer companies.
• American Resources Corporation business varies wildly, ups and downs could be very frequent. It's very risky. It looks bottom tier against rivals.

Margins score: 1.8

• AREC profit margins -on goods and services sold- are usually destitute. They stand bottom tier against rival companies.
• Business profit on sales tends to be extremely poor. It's last-in-rank when measured against competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually extremely poor. They remain a disappointment compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be extremely poor in relation to total revenues. They're still bottom tier against similar companies.
• Profits -before income taxes- are usually extremely poor considering total sales, and remain last-in-rank when measured against rivals.
• Total net profit tends to be extremely poor when confronted to sales. Company stands last-in-rank when measured against comparable firms.

Growth score: 1.0

• American Resources Corporation couldn't always profit -on goods and services sold- in the past years. It's been a disappointment compared to competitors.
• In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
• In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
• In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
• In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
• In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
• The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 5.3

• AREC had still to pay income taxes, even though in recent past years mostly lost money. It's been bottom tier against peers.
• Research and development expenses consume some portion of revenues. It's last-in-rank when measured against competitors.
• The company shows excellent business growth in relation to research and development efforts. It stands in a weak position compared to rival companies.

Profitability score: 1.0

• American Resources Corporation usually gets pauper returns on the resources it controls. It proves last-in-rank when measured against peer firms.
• Due to insufficient track history, we were unable to estimate typical returns on invested capital (ROIC). They remain undisclosed in relation to similar companies.
• Normal return on equity (ROE) is unavailable at this time, because of not enough yearly inputs to calculate. It ranks unknown against competitors.
• In the past, got pauper returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's last-in-rank when measured against comparable enterprises.

Usage of Funds score: 1.4

• AREC on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands last-in-rank when measured against rival firms.
• The company is usually sparsely replacing property, plant, and equipment that gets old, instead using funds in something else. It can't keep forever, which is last-in-rank when measured against industry peers.
• In the past twelve months the stock paid no dividends. It came bottom tier against competitors.
• The company pays no dividend, so measuring its growth is meaningless. The company has behaved in an conservative way compared to similar firms.
• As no dividends are paid, it is useless trying to estimate their sustainability in time. Sustainability looks not applicable in regard to comparable companies.
• The company has greatly enlarged the pool of investors in previous years, resulting in more mouths feeding on the pie of profits. It remains a disappointment compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a very weak position compared to rivals.
• We do not have sufficient data to comment on buybacks and their sustainability. It still looks dubious against competitors.

Balance Sheet score: 4.8

• American Resources Corporation intangible assets (like brands and goodwill) represent a huge portion of resources controlled, according to accounting books. There could be major difficulties in liquidating them if the company ever gets in financial distress. It happens to be last-in-rank when measured against peer companies.
• The company has lower short-term resources than short-term obligations. Unless it's part of the business model, there might be liquidity concerns. It turns to be a disappointment compared to similar firms.
• Most resources controlled were provided for with financial debt. Creditors have more claims on the company than shareholders. Unless the company is a financial institution that takes deposits, the situation might be very risky. It remains bottom tier against rival firms.
• Most controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks last-in-rank when measured against rivals.
• For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's in a very weak position compared to peer firms.
• For every dollar of short-term obligations, the company has almost another of cash and equivalents, which is slightly worse than similar enterprises.
• Usually, sales are mostly on cash. It still ranks great when measured against peers.
• Normally has no inventories. It comes up as impressive in relation to competitors.
• On average, it takes less than one month from the purchase to charging customers. It happens to be better than most peers.
• On average pays suppliers during the first couple of weeks from the purchase. It ranks substantially worse when measured against industry peers.
• The company pays its suppliers almost when charging its customers, so there's very little money invested in working capital. It's excellent in relation to similar companies.
• Has usually been losing money on the business, so net interest expenses must be paid by increasing borrowings, which is unsustainable in the long run. The situation is very risky for both creditors and shareholders, profitability must increase. It stands bottom tier against rival firms.
• Business has usually been operated at a loss. Unless prospects improve, the company is no position to decrease loans taken levels but by additional shareholders' funding. Profitability must improve. It ranks last-in-rank when measured against comparable enterprises.
• Revenues are huge in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements, allows the company to keep more money to reward stockholders in the long run. It looks impressive in relation to similar firms.
• Resource exploitation is huge considering yearly sales, which is great. This metric is normally tied to the industry where the firm belongs. It's still top-notch against peer companies.

Valuation score: 2.5

• American Resources Corporation reported losses, so valuating it in relation to earnings is meaningless. It happens to be last-in-rank when measured against competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains a disappointment compared to peers.
• In the past twelve months, the company neither generated nor consumed funds. Whatever funds it could get, it reinvested in the business, which stands mediocre against similar companies.
• The company usually consumes more funds than can genuinely generate. Business needs are meet by borrowing money or consuming preexistent cash, which can only keep up until a certain limit. Unless the company is driving business growth, genuine profitability may be brought into question. It's still last-in-rank when measured against industry firms.
• In the past twelve months, the company has greatly enlarged the pool of investors by issuing new shares. Future profits need to be high enough to justify the measure, as the pie of earnings will now be split among plenty more stockholders. It came up a disappointment compared to peer ventures.
• The company has neither net debt nor net cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks slightly better than similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation has been negative, as the company lost money. It ranks last-in-rank when measured against peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a three or four to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
• The relation between the stock price and accounting book value is extremely high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains worse than most peer firms.
• In the past twelve months, the operating business lost a lot of money. It happens to be substantially worse when measured against industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a very low earnings power ability when measured against the current stock price and financial position. Profitability is in dispute. It's still a disappointment compared to peer companies.

Total score: 2.9

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Awarener score: 3.6

Conclusion

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