Shareholders in Liberty Latin America (NASDAQ:LILA) are in the red if they invested three years ago
If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Liberty Latin America Ltd. (NASDAQ:LILA) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 52% decline in the share price in that time. And over the last year the share price fell 42%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 25% in the last three months. Of course, this share price action may well have been influenced by the 17% decline in the broader market, throughout the period.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Check out our latest analysis for Liberty Latin America
Liberty Latin America 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, Liberty Latin America saw its revenue grow by 8.9% per year, compound. That's a pretty good rate of top-line growth. So some shareholders would be frustrated with the compound loss of 15% per year. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. So this is one stock that might be worth investigating further, or even adding to your watchlist.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
The last twelve months weren't great for Liberty Latin America shares, which performed worse than the market, costing holders 42%. The market shed around 18%, no doubt weighing on the stock price. Shareholders have lost 15% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. It's always interesting to track share price performance over the longer term. But to understand Liberty Latin America better, we need to consider many other factors. Even so, be aware that Liberty Latin America is showing 1 warning sign in our investment analysis , you should know about...
Liberty Latin America 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.
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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.
