Yahoo Finance Some Centaurus Energy (CVE:CTA) Shareholders Have Copped A Big 62% Share Price Drop
Centaurus Energy Inc. (CVE:CTA) shareholders should be happy to see the share price up 29% in the last month. But that is little comfort to those holding over the last half decade, sitting on a big loss. Indeed, the share price is down 62% in the period. So we're not so sure if the recent bounce should be celebrated. But it could be that the fall was overdone.
See our latest analysis for Centaurus Energy
Centaurus Energy isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 five years Centaurus Energy saw its revenue shrink by 20% per year. That's definitely a weaker result than most pre-profit companies report. It seems appropriate, then, that the share price slid about 17% annually during that time. It's fair to say most investors don't like to invest in loss making companies with falling revenue. This looks like a really risky stock to buy, at a glance.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Centaurus Energy's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Centaurus Energy shareholders are down 42% for the year, but the market itself is up 1.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 17% per year over five years. We realise that Buffett 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. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Centaurus Energy (of which 1 is a bit unpleasant!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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.
