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Did Changing Sentiment Drive Titan International's (NYSE:TWI) Share Price Down A Worrying 68%?

Simply Wall St

Titan International, Inc. (NYSE:TWI) shareholders should be happy to see the share price up 25% in the last month. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 68%. So it is really good to see an improvement. Perhaps the company has turned over a new leaf.

View our latest analysis for Titan International

Given that Titan International 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last three years, Titan International saw its revenue grow by 8.1% per year, compound. That's a pretty good rate of top-line growth. That contrasts with the weak share price, which has fallen 32% compounded, over three years. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

NYSE:TWI Income Statement, December 23rd 2019

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Titan International in this interactive graph of future profit estimates.

A Different Perspective

While the broader market gained around 37% in the last year, Titan International shareholders lost 26% (even including dividends) . 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 19% 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. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Titan International by clicking this link.

Titan International is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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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