Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Orascom Development Holding AG (VTX:ODHN) share price is down 50% in the last year. That falls noticeably short of the market decline of around 1.8%. The silver lining (for longer term investors) is that the stock is still 38% higher than it was three years ago. The falls have accelerated recently, with the share price down 42% in the last three months. This could be related to the recent financial results – you can catch up on the most recent data by reading our company report.
Check out our latest analysis for Orascom Development Holding
Given that Orascom Development Holding 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. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because it’s hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last twelve months, Orascom Development Holding increased its revenue by 33%. We think that is pretty nice growth. Unfortunately that wasn’t good enough to stop the share price dropping 50%. You might even wonder if the share price was previously over-hyped. But if revenue keeps growing, then at a certain point the share price would likely follow.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Orascom Development Holding’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Orascom Development Holding shareholders are down 50% for the year, but the market itself is up 1.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 11% 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. 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. Take risks, for example – Orascom Development Holding has 3 warning signs (and 1 which is a bit concerning) we think you should know about.
Of course Orascom Development Holding may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CH exchanges.
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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. 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. Thank you for reading.