U.S. Markets closed

Easy Come, Easy Go: How House of Agriculture Spiroy (ATH:SPIR) Shareholders Got Unlucky And Saw 70% Of Their Cash Evaporate

Simply Wall St

Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!

As every investor would know, not every swing hits the sweet spot. But really big losses can really drag down an overall portfolio. So spare a thought for the long term shareholders of The House of Agriculture Spiroy S.A. (ATH:SPIR); the share price is down a whopping 70% in the last three years. That would be a disturbing experience. The more recent news is of little comfort, with the share price down 31% in a year.

See our latest analysis for House of Agriculture Spiroy

Given that House of Agriculture Spiroy 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, House of Agriculture Spiroy saw its revenue grow by 0.4% per year, compound. That's not a very high growth rate considering it doesn't make profits. But the share price crash at 33% per year does seem a bit harsh! While we're definitely wary of the stock, after that kind of performance, it could be an over-reaction. Of course, revenue growth is nice but generally speaking the lower the profits, the riskier the business - and this business isn't making steady profits.

The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.

ATSE:SPIR Income Statement, May 6th 2019

If you are thinking of buying or selling House of Agriculture Spiroy stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that House of Agriculture Spiroy shareholders are down 31% for the year. Unfortunately, that's worse than the broader market decline of 4.8%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 5.7% over the last half decade. 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 could get a better understanding of House of Agriculture Spiroy's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course House of Agriculture Spiroy 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 GR 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.