Integrated Payment Technologies (ASX:IP1) Long Term Shareholders are 15% In The Black
For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Integrated Payment Technologies Limited (ASX:IP1) shareholders, since the share price is down 24% in the last three years, falling well short of the market return of around 32%. The falls have accelerated recently, with the share price down 16% in the last three months.
View our latest analysis for Integrated Payment Technologies
Integrated Payment Technologies 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last three years Integrated Payment Technologies saw its revenue shrink by 7.7% per year. That's not what investors generally want to see. The annual decline of 7% per year in that period has clearly disappointed holders. That makes sense given the lack of either profits or revenue growth. Of course, sentiment could become too negative, and the company may actually be making progress to profitability.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Integrated Payment Technologies' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
We've already covered Integrated Payment Technologies' share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that Integrated Payment Technologies' TSR, at 15% is higher than its share price return of -24%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
Over the last year Integrated Payment Technologies shareholders have received a TSR of 8.3%. It's always nice to make money but this return falls short of the market return which was about 31% for the year. On the bright side that gain is actually better than the average return of 5% over the last three years, implying that the company is doing better recently. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. It's always interesting to track share price performance over the longer term. But to understand Integrated Payment Technologies better, we need to consider many other factors. Even so, be aware that Integrated Payment Technologies is showing 5 warning signs in our investment analysis , and 3 of those are a bit concerning...
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.
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. 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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