Every investor on earth makes bad calls sometimes. But you want to avoid the really big losses like the plague. So consider, for a moment, the misfortune of ECSC Group plc (LON:ECSC) investors who have held the stock for three years as it declined a whopping 71%. That would certainly shake our confidence in the decision to own the stock. It’s down 15% in the last seven days.
Check out our latest analysis for ECSC Group
Given that ECSC Group 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. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
AIM:ECSC Income Statement, March 18th 2020
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
While it’s never nice to take a loss, ECSC Group shareholders can take comfort that their trailing twelve month loss of 18% wasn’t as bad as the market loss of around -22%. The one-year return is also not as bad as the 34% per annum loss investors have suffered over the last three years. It could well be that the business has begun to stabilize, though the recent returns are hardly impressive. 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. Consider for instance, the ever-present spectre of investment risk. We’ve identified 6 warning signs with ECSC Group (at least 3 which make us uncomfortable) , and understanding them should be part of your investment process.
Of course ECSC Group 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 GB 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.
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