Yahoo Finance Chemtrade Logistics Income Fund (TSE:CHE.UN) Could Be Less Than A Year Away From Profitability
Chemtrade Logistics Income Fund (TSE:CHE.UN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Chemtrade Logistics Income Fund offers industrial chemicals and services in Canada, the United States, and South America. The CA$919m market-cap company’s loss lessened since it announced a CA$235m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$204m, as it approaches breakeven. Many investors are wondering about the rate at which Chemtrade Logistics Income Fund will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Chemtrade Logistics Income Fund
Chemtrade Logistics Income Fund is bordering on breakeven, according to the 4 Canadian Chemicals analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$6.5m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! How fast will the company have to grow to reach the consensus forecasts that anticipate breakeven by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 129% year-on-year, on average, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Chemtrade Logistics Income Fund given that this is a high-level summary, but, take into account that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Chemtrade Logistics Income Fund is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.
Next Steps:
There are too many aspects of Chemtrade Logistics Income Fund to cover in one brief article, but the key fundamentals for the company can all be found in one place – Chemtrade Logistics Income Fund's company page on Simply Wall St. We've also compiled a list of relevant aspects you should look at:
Valuation: What is Chemtrade Logistics Income Fund worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Chemtrade Logistics Income Fund is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Chemtrade Logistics Income Fund’s board and the CEO’s background.
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.
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This article by Simply Wall St 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. Simply Wall St has no position in any stocks mentioned.