Investing in stocks inevitably means buying into some companies that perform poorly. Long term Protector Forsikring ASA (OB:PROTCT) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 52% in that time. And the ride hasn’t got any smoother in recent times over the last year, with the price 40% lower in that time. Furthermore, it’s down 32% in about a quarter. That’s not much fun for holders.
Check out our latest analysis for Protector Forsikring
Given that Protector Forsikring 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 three years, Protector Forsikring saw its revenue grow by 5.9% per year, compound. Given it’s losing money in pursuit of growth, we are not really impressed with that. This uninspiring revenue growth has no doubt helped send the share price lower; it dropped 22% during the period. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. Keep in mind it isn’t unusual for good businesses to have a tough time or a couple of uninspiring years.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
OB:PROTCT Income Statement, March 9th 2020
This free interactive report on Protector Forsikring’s balance sheet strength is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
We’d be remiss not to mention the difference between Protector Forsikring’s total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Protector Forsikring shareholders, and that cash payout explains why its total shareholder loss of 50%, over the last 3 years, isn’t as bad as the share price return.
A Different Perspective
While the broader market lost about 8.7% in the twelve months, Protector Forsikring shareholders did even worse, losing 40%. 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 11% per year over five years. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. It’s always interesting to track share price performance over the longer term. But to understand Protector Forsikring better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Protector Forsikring , and understanding them should be part of your investment process.
We will like Protector Forsikring 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 NO 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.
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