We’re definitely into long term investing, but some companies are simply bad investments over any time frame. We really hate to see fellow investors lose their hard-earned money. Imagine if you held ALJ Regional Holdings, Inc. (NASDAQ:ALJJ) for half a decade as the share price tanked 89%. And it’s not just long term holders hurting, because the stock is down 72% in the last year. Shareholders have had an even rougher run lately, with the share price down 61% in the last 90 days.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
See our latest analysis for ALJ Regional Holdings
Given that ALJ Regional Holdings 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last half decade, ALJ Regional Holdings saw its revenue increase by 14% per year. That’s a pretty good rate for a long time period. So it is unexpected to see the stock down 36% per year in the last five years. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
NasdaqGM:ALJJ Income Statement April 28th 2020
It’s probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of ALJ Regional Holdings’s earnings, revenue and cash flow.
A Different Perspective
While the broader market lost about 2.1% in the twelve months, ALJ Regional Holdings shareholders did even worse, losing 72%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 36% per year over five years. 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. It’s always interesting to track share price performance over the longer term. But to understand ALJ Regional Holdings better, we need to consider many other factors. For example, we’ve discovered 4 warning signs for ALJ Regional Holdings (2 are potentially serious!) that you should be aware of before investing here.
We will like ALJ Regional Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.