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We think intelligent long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example the Hawaiian Holdings, Inc. (NASDAQ:HA) share price dropped 59% over five years. That is extremely sub-optimal, to say the least. More recently, the share price has dropped a further 18% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
With the stock having lost 8.4% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
Given that Hawaiian Holdings 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over half a decade Hawaiian Holdings reduced its trailing twelve month revenue by 15% for each year. That puts it in an unattractive cohort, to put it mildly. It seems appropriate, then, that the share price slid about 10% annually during that time. We don't generally like to own companies that lose money and don't grow revenues. You might be better off spending your money on a leisure activity. You'd want to research this company pretty thoroughly before buying, it looks a bit too risky for us.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Hawaiian Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Hawaiian Holdings shareholders have received returns of 41% over twelve months, which isn't far from the general market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 9%, which was endured over half a decade. We're pretty skeptical of turnaround stories, but it's good to see the recent share price recovery. It's always interesting to track share price performance over the longer term. But to understand Hawaiian Holdings better, we need to consider many other factors. Take risks, for example - Hawaiian Holdings has 2 warning signs (and 1 which is a bit concerning) we think you should know about.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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