If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. Long term Agromep S.A. (WSE:AGP) shareholders know that all too well, since the share price is down considerably over three years. Regrettably, they have had to cope with a 69% drop in the share price over that period. Unhappily, the share price slid 3.0% in the last week.
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While Agromep made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over three years, Agromep grew revenue at 6.3% per year. That's not a very high growth rate considering it doesn't make profits. This uninspiring revenue growth has no doubt helped send the share price lower; it dropped 32% during the period. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term). After all, growing a business isn't easy, and the process will not always be smooth.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
While it's never nice to take a loss, Agromep shareholders can take comfort that their trailing twelve month loss of 1.0% wasn't as bad as the market loss of around 4.3%. What is more upsetting is the 5.0% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. Before forming an opinion on Agromep you might want to consider these 3 valuation metrics.
But note: Agromep may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on PL exchanges.
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.
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. Thank you for reading.