Yahoo Finance The ATW Tech (CVE:ATW) Share Price Is Down 91% So Some Shareholders Are Rather Upset
It's not possible to invest over long periods without making some bad investments. But you want to avoid the really big losses like the plague. So spare a thought for the long term shareholders of ATW Tech Inc. (CVE:ATW); the share price is down a whopping 91% in the last three years. That would be a disturbing experience. And the ride hasn't got any smoother in recent times over the last year, with the price 63% lower in that time. Furthermore, it's down 67% in about a quarter. That's not much fun for holders. But this could be related to the weak market, which is down 27% in the same period.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
View our latest analysis for ATW Tech
ATW Tech wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years, ATW Tech saw its revenue grow by 27% per year, compound. That is faster than most pre-profit companies. So on the face of it we're really surprised to see the share price down 55% a year in the same time period. The share price makes us wonder if there is an issue with profitability. Sometimes fast revenue growth doesn't lead to profits. If the company is low on cash, it may have to raise capital soon.
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
While the broader market lost about 10.0% in the twelve months, ATW Tech shareholders did even worse, losing 63%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 32% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand ATW Tech better, we need to consider many other factors. For example, we've discovered 3 warning signs for ATW Tech (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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.
