As an investor, mistakes are inevitable. But you have a problem if you face massive losses more than once in a while. So spare a thought for the long term shareholders of Oneview Healthcare PLC (ASX:ONE); the share price is down a whopping 95% in the last three years. That would be a disturbing experience. And the ride hasn't got any smoother in recent times over the last year, with the price 78% lower in that time. Shareholders have had an even rougher run lately, with the share price down 13% in the last 90 days.
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.
Given that Oneview Healthcare 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.
Over three years, Oneview Healthcare grew revenue at 16% per year. That's a pretty good rate of top-line growth. So it seems unlikely the 64% share price drop (each year) is entirely about the revenue. More likely, the market was spooked by the cost of that revenue. If you buy into companies that lose money then you always risk losing money yourself. Just don't lose the lesson.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So it makes a lot of sense to check out what analysts think Oneview Healthcare will earn in the future (free profit forecasts).
A Different Perspective
Over the last year, Oneview Healthcare shareholders took a loss of 78%. In contrast the market gained about 7.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 64% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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 Oneview Healthcare by clicking this link.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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