How Much Did Ambac Financial Group's(NYSE:AMBC) Shareholders Earn From Share Price Movements Over The Last Year?
It is doubtless a positive to see that the Ambac Financial Group, Inc. (NYSE:AMBC) share price has gained some 35% in the last three months. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 22% in a year, falling short of the returns you could get by investing in an index fund.
See our latest analysis for Ambac Financial Group
Because Ambac Financial Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.
Ambac Financial Group's revenue didn't grow at all in the last year. In fact, it fell 48%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 22% in that time. What would you expect when revenue is falling, and it doesn't make a profit? It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Investors in Ambac Financial Group had a tough year, with a total loss of 22%, against a market gain of about 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 3% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Ambac Financial Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Ambac Financial Group (of which 1 doesn't sit too well with us!) you should know about.
Of course Ambac Financial Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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. 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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