It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Five Point Holdings, LLC (NYSE:FPH) share price is down 10% in the last year. That contrasts poorly with the market return of 13%. We wouldn't rush to judgement on Five Point Holdings because we don't have a long term history to look at. It's down 13% in about a month.
Given that Five Point 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. 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.
Five Point Holdings's revenue didn't grow at all in the last year. In fact, it fell 25%. That looks pretty grim, at a glance. The stock price has languished lately, falling 10% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
While Five Point Holdings shareholders are down 10% for the year, the market itself is up 13%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. Before spending more time on Five Point Holdings it might be wise to click here to see if insiders have been buying or selling shares.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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 firstname.lastname@example.org. 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.