Yahoo Finance Did You Manage To Avoid Frank's International's (NYSE:FI) Devastating 75% Share Price Drop?
Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. For example, we sympathize with anyone who was caught holding Frank's International N.V. (NYSE:FI) during the five years that saw its share price drop a whopping 75%. And some of the more recent buyers are probably worried, too, with the stock falling 20% in the last year. Unfortunately the share price momentum is still quite negative, with prices down 8.5% in thirty days. But this could be related to poor market conditions -- stocks are down 3.6% in the same time.
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Check out our latest analysis for Frank's International
Given that Frank's International 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over half a decade Frank's International reduced its trailing twelve month revenue by 23% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 24% per year in the same time period. We don't think this is a particularly promising picture. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
Frank's International is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Frank's International stock, you should check out this free report showing analyst consensus estimates for future profits.
A Dividend Lost
It's important to keep in mind that we've been talking about the share price returns, which don't include dividends, while the total shareholder return does. Many would argue the TSR gives a more complete picture of the value a stock brings to its holders. Over the last 5 years, Frank's International generated a TSR of -72%, which is, of course, better than the share price return. Although the company had to cut dividends, it has paid cash to shareholders in the past.
A Different Perspective
While the broader market gained around 3.5% in the last year, Frank's International shareholders lost 20%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 23% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
But note: Frank's International may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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.
