Shareholders in Anaergia (TSE:ANRG) have lost 83%, as stock drops 28% this past week
Anaergia Inc. (TSE:ANRG) shareholders will doubtless be very grateful to see the share price up 47% in the last month. But that hardly compensates for the shocking decline over the last twelve months. To wit, the stock has dropped 83% over the last year. So the rise may not be much consolation. Only time will tell if the company can sustain the turnaround. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
With the stock having lost 28% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for Anaergia
Anaergia wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last twelve months, Anaergia increased its revenue by 20%. We think that is pretty nice growth. Unfortunately, the market wanted something better, given it sent the share price 83% lower during the year. One fear might be that the company might be losing too much money and will need to raise more. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
While Anaergia shareholders are down 83% for the year, the market itself is up 2.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 62% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. Case in point: We've spotted 3 warning signs for Anaergia you should be aware of, and 2 of them are concerning.
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 Canadian 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.
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