If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Enablence Technologies Inc. (CVE:ENA) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 69% in that time. And more recent buyers are having a tough time too, with a drop of 43% in the last year.
Check out our latest analysis for Enablence Technologies
Given that Enablence Technologies didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. When a company doesn’t make profits, we’d generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years Enablence Technologies saw its revenue shrink by 28% per year. That’s definitely a weaker result than most pre-profit companies report. Arguably, the market has responded appropriately to this business performance by sending the share price down 32% (annualized) in the same time period. When revenue is dropping, and losses are still costing, and the share price sinking fast, it’s fair to ask if something is remiss. It could be a while before the company repays long suffering shareholders with share price gains.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
TSXV:ENA Income Statement, February 24th 2020
This free interactive report on Enablence Technologies’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Investors in Enablence Technologies had a tough year, with a total loss of 43%, against a market gain of about 7.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 17% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Be aware that Enablence Technologies is showing 5 warning signs in our investment analysis , and 2 of those shouldn’t be ignored…
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
If you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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