Yahoo Finance Did Changing Sentiment Drive Imperial Metals's (TSE:III) Share Price Down A Painful 80%?
Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We don't wish catastrophic capital loss on anyone. Anyone who held Imperial Metals Corporation (TSE:III) for five years would be nursing their metaphorical wounds since the share price dropped 80% in that time. It's up 4.7% in the last seven days.
Check out our latest analysis for Imperial Metals
Because Imperial Metals made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over five years, Imperial Metals grew its revenue at 18% per year. That's better than most loss-making companies. So on the face of it we're really surprised to see the share price has averaged a fall of 27% each year, in the same time period. It could be that the stock was over-hyped before. While there might be an opportunity here, you'd want to take a close look at the balance sheet strength.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
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. If you are thinking of buying or selling Imperial Metals stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Imperial Metals's TSR for the year was broadly in line with the market average, at 12%. The silver lining is that the share price is up in the short term, which flies in the face of the annualised loss of 27% over the last five years. We're pretty skeptical of turnaround stories, but it's good to see the recent share price recovery. 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. To that end, you should learn about the 4 warning signs we've spotted with Imperial Metals (including 1 which is shouldn't be ignored) .
Imperial Metals 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 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.
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