For many investors, the main point of stock picking is to generate higher returns than the overall market. But if you try your hand at stock picking, your risk returning less than the market. Unfortunately, that's been the case for longer term IAMGOLD Corporation (TSE:IMG) shareholders, since the share price is down 34% in the last three years, falling well short of the market return of around 17%. Furthermore, it's down 16% in about a quarter. That's not much fun for holders.
IAMGOLD isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, IAMGOLD saw its revenue grow by 2.0% per year, compound. That's not a very high growth rate considering it doesn't make profits. Indeed, the stock dropped 13% over the last three years. Shareholders will probably be hoping growth picks up soon. But the real upside for shareholders will be if the company can start generating profits.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling IAMGOLD stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
IAMGOLD shareholders gained a total return of 4.5% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 2.4% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with IAMGOLD .
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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