Newpark Resources (NYSE:NR) shareholders have endured a 57% loss from investing in the stock three years ago
While it may not be enough for some shareholders, we think it is good to see the Newpark Resources, Inc. (NYSE:NR) share price up 28% in a single quarter. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 57%. So it is really good to see an improvement. Perhaps the company has turned over a new leaf.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Newpark Resources
Given that Newpark Resources 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Over the last three years, Newpark Resources' revenue dropped 24% per year. That means its revenue trend is very weak compared to other loss making companies. Arguably, the market has responded appropriately to this business performance by sending the share price down 16% (annualized) in the same time period. Bagholders or 'baggies' are people who buy more of a stock as the price collapses. They are then left 'holding the bag' if the shares turn out to be worthless. It could be a while before the company repays long suffering shareholders with share price gains.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling Newpark Resources stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's nice to see that Newpark Resources shareholders have received a total shareholder return of 24% over the last year. There's no doubt those recent returns are much better than the TSR loss of 9% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Newpark Resources better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Newpark Resources (of which 2 are a bit concerning!) you should know about.
Of course Newpark Resources 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.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
