Did Changing Sentiment Drive Oil Country Tubular's (NSE:OILCOUNTUB) Share Price Down A Painful 88%?
Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who held Oil Country Tubular Limited (NSE:OILCOUNTUB) for five whole years - as the share price tanked 88%. We also note that the stock has performed poorly over the last year, with the share price down 70%. The falls have accelerated recently, with the share price down 51% 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.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
See our latest analysis for Oil Country Tubular
Given that Oil Country Tubular 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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.
Over half a decade Oil Country Tubular reduced its trailing twelve month revenue by 58% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 34% per year in that period. This kind of price performance makes us very wary, especially when combined with falling revenue. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling Oil Country Tubular stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market lost about 14% in the twelve months, Oil Country Tubular shareholders did even worse, losing 70%. 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 34% per year over five years. We realise that Buffett 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 businesses. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.
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.
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. Thank you for reading.
