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What Type Of Returns Would Universal Stainless & Alloy Products'(NASDAQ:USAP) Shareholders Have Earned If They Purchased Their Shares Three Years Ago?

·3 min read

While it may not be enough for some shareholders, we think it is good to see the Universal Stainless & Alloy Products, Inc. (NASDAQ:USAP) share price up 25% in a single quarter. But over the last three years we've seen a quite serious decline. In that time, the share price dropped 67%. So it's good to see it climbing back up. Perhaps the company has turned over a new leaf.

Check out our latest analysis for Universal Stainless & Alloy Products

Given that Universal Stainless & Alloy Products didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years, Universal Stainless & Alloy Products' revenue dropped 2.8% per year. That is not a good result. With revenue in decline, and profit but a dream, we can understand why the share price has been declining at 19% per year. Of course, it's the future that will determine whether today's price is a good one. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.

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

earnings-and-revenue-growth
earnings-and-revenue-growth

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Universal Stainless & Alloy Products

A Different Perspective

Universal Stainless & Alloy Products shareholders gained a total return of 24% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 1.1% endured over half a decade. It could well be that the business is stabilizing. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Universal Stainless & Alloy Products , and understanding them should be part of your investment process.

Universal Stainless & Alloy Products is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.