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Those Who Purchased CIM International Group (CSE:CIM) Shares Three Years Ago Have A 78% Loss To Show For It

Simply Wall St
·3 min read

As every investor would know, not every swing hits the sweet spot. But you want to avoid the really big losses like the plague. So take a moment to sympathize with the long term shareholders of CIM International Group Inc. (CSE:CIM), who have seen the share price tank a massive 78% over a three year period. That would certainly shake our confidence in the decision to own the stock. And the ride hasn't got any smoother in recent times over the last year, with the price 21% lower in that time.

View our latest analysis for CIM International Group

Because CIM International 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. 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 three years, CIM International Group grew revenue at 32% per year. That's well above most other pre-profit companies. So why has the share priced crashed 40% per year, in the same time? The share price makes us wonder if there is an issue with profitability. Ultimately, revenue growth doesn't amount to much if the business can't scale well. Unless the balance sheet is strong, the company might have to raise capital.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

CNSX:CIM Income Statement April 27th 2020
CNSX:CIM Income Statement April 27th 2020

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

CIM International Group shareholders are down 21% for the year, falling short of the market return. The market shed around 16%, no doubt weighing on the stock price. However, the loss over the last year isn't as bad as the 40% per annum loss investors have suffered over the last three years. We'd need clear signs of growth in the underlying business before we could muster much enthusiasm for this one. 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. To that end, you should learn about the 4 warning signs we've spotted with CIM International Group (including 2 which is shouldn't be ignored) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

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. Thank you for reading.