This month, we saw the Altus Midstream Company (NASDAQ:ALTM) up an impressive 34%. But that isn't much consolation to those who have suffered through the declines of the last year. Specifically, the stock price slipped by 67% in that time. Some might say the recent bounce is to be expected after such a bad drop. Of course, it could be that the fall was overdone.
Altus Midstream isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.
In the last year Altus Midstream saw its revenue grow by 104%. That's a strong result which is better than most other loss making companies. In contrast the share price is down 67% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Altus Midstream in this interactive graph of future profit estimates.
A Different Perspective
While Altus Midstream shareholders are down 67% for the year, the market itself is up 30%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 6.7% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Altus Midstream is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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.
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. Thank you for reading.