U.S. Markets close in 1 hr 38 mins
  • S&P 500

    3,858.77
    +6.92 (+0.18%)
     
  • Dow 30

    31,233.18
    +44.80 (+0.14%)
     
  • Nasdaq

    13,541.00
    +83.75 (+0.62%)
     
  • Russell 2000

    2,145.12
    -15.50 (-0.72%)
     
  • Crude Oil

    53.15
    -0.16 (-0.30%)
     
  • Gold

    1,869.20
    +2.70 (+0.14%)
     
  • Silver

    26.00
    +0.24 (+0.93%)
     
  • EUR/USD

    1.2162
    +0.0047 (+0.3892%)
     
  • 10-Yr Bond

    1.1080
    +0.0180 (+1.65%)
     
  • Vix

    21.43
    -0.15 (-0.70%)
     
  • GBP/USD

    1.3722
    +0.0067 (+0.4885%)
     
  • USD/JPY

    103.5190
    -0.0510 (-0.0492%)
     
  • BTC-USD

    32,283.88
    -2,667.80 (-7.63%)
     
  • CMC Crypto 200

    639.29
    -40.61 (-5.97%)
     
  • FTSE 100

    6,715.42
    -24.97 (-0.37%)
     
  • Nikkei 225

    28,756.86
    +233.60 (+0.82%)
     

Those Who Purchased STS Group (ETR:SF3) Shares A Year Ago Have A 78% Loss To Show For It

Simply Wall St

It's not a secret that every investor will make bad investments, from time to time. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. It must have been painful to be a STS Group AG (ETR:SF3) shareholder over the last year, since the stock price plummeted 78% in that time. A loss like this is a stark reminder that portfolio diversification is important. We wouldn't rush to judgement on STS Group because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 36% in the last three months.

View our latest analysis for STS Group

Because STS Group 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last twelve months, STS Group increased its revenue by 0.2%. That's not a very high growth rate considering it doesn't make profits. Even so you could argue that it's surprising that the share price has tanked 78%. Clearly the market was expecting better, and this may blow out projections of profitability. But if it will make money, albeit later than previously believed, this could be an opportunity.

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

XTRA:SF3 Income Statement, September 5th 2019
XTRA:SF3 Income Statement, September 5th 2019

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

A Different Perspective

We doubt STS Group shareholders are happy with the loss of 78% over twelve months. That falls short of the market, which lost 2.9%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 36% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

Of course STS Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DE 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 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. Thank you for reading.