We think intelligent long term investing is the way to go. But unfortunately, some companies simply don’t succeed. To wit, the CSC Holdings Limited (SGX:C06) share price managed to fall 64% over five long years. That is extremely sub-optimal, to say the least. Shareholders have had an even rougher run lately, with the share price down 24% in the last 90 days. Of course, this share price action may well have been influenced by the 20% decline in the broader market, throughout the period.
See our latest analysis for CSC Holdings
Given that CSC 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. 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 five years CSC Holdings saw its revenue shrink by 6.6% per year. That’s not what investors generally want to see. The share price decline of 18% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. We don’t think anyone is rushing to buy this stock. Not that many investors like to invest in companies that are losing money and not growing revenue.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
What about the Total Shareholder Return (TSR)?
We’ve already covered CSC Holdings’s share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for CSC Holdings shareholders, and that cash payout explains why its total shareholder loss of 61%, over the last 5 years, isn’t as bad as the share price return.
A Different Perspective
While it’s certainly disappointing to see that CSC Holdings shares lost 16% throughout the year, that wasn’t as bad as the market loss of 21%. Of far more concern is the 17% p.a. loss served to shareholders over the last five years. While the losses are slowing we doubt many shareholders are happy with the stock. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that CSC Holdings is showing 5 warning signs in our investment analysis , and 1 of those is concerning…
We will like CSC 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 SG 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.
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.