Some stocks are best avoided. It hits us in the gut when we see fellow investors suffer a loss. Anyone who held Quest Resource Holding Corporation (NASDAQ:QRHC) for five years would be nursing their metaphorical wounds since the share price dropped 82% in that time. Unfortunately the share price momentum is still quite negative, with prices down 13% in thirty days.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
Because Quest Resource Holding is loss-making, 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last five years Quest Resource Holding saw its revenue shrink by 10.0% per year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 29% per year in the same time period. We don't think this is a particularly promising picture. Of course, the poor performance could mean the market has been too severe selling down. That can happen.
The graphic below depicts how earnings and revenue have changed over time (unveil 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
It's nice to see that Quest Resource Holding shareholders have received a total shareholder return of 29% over the last year. There's no doubt those recent returns are much better than the TSR loss of 29% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you would like to research Quest Resource Holding in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
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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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.