It’s not possible to invest over long periods without making some bad investments. But really bad investments should be rare. So take a moment to sympathize with the long term shareholders of Singapore Myanmar Investco Limited (SGX:Y45), who have seen the share price tank a massive 95% over a three year period. That would be a disturbing experience. And over the last year the share price fell 80%, so we doubt many shareholders are delighted. Shareholders have had an even rougher run lately, with the share price down 38% in the last 90 days. Of course, this share price action may well have been influenced by the 22% decline in the broader market, throughout the period.
We really feel for shareholders in this scenario. It’s a good reminder of the importance of diversification, and it’s worth keeping in mind there’s more to life than money, anyway.
See our latest analysis for Singapore Myanmar Investco
Given that Singapore Myanmar Investco 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years, Singapore Myanmar Investco saw its revenue grow by 6.8% per year, compound. That’s not a very high growth rate considering it doesn’t make profits. Nonetheless, it’s fair to say the rapidly declining share price (down 63%, compound, over three years) suggests the market is very disappointed with this level of growth. We generally don’t try to ‘catch the falling knife’. Before considering a purchase, take a look at the losses the company is racking up.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
SGX:Y45 Income Statement April 11th 2020
Take a more thorough look at Singapore Myanmar Investco’s financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 20% in the twelve months, Singapore Myanmar Investco shareholders did even worse, losing 80%. Having said that, it’s inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 41% 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. For example, we’ve discovered 5 warning signs for Singapore Myanmar Investco (2 are a bit concerning!) that you should be aware of before investing here.
Of course Singapore Myanmar Investco 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 SG 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.