Yahoo Finance Further weakness as National Express Group (LON:NEX) drops 5.7% this week, taking three-year losses to 64%
Investing in stocks inevitably means buying into some companies that perform poorly. But long term National Express Group PLC (LON:NEX) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 64% decline in the share price in that time. And more recent buyers are having a tough time too, with a drop of 29% in the last year. Even worse, it's down 14% in about a month, which isn't fun at all. However, we note the price may have been impacted by the broader market, which is down 9.4% in the same time period.
After losing 5.7% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Check out our latest analysis for National Express Group
Given that National Express Group 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. Shareholders of unprofitable companies usually expect strong 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 three years National Express Group saw its revenue shrink by 7.0% per year. That's not what investors generally want to see. The share price decline of 18% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. 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.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. So it makes a lot of sense to check out what analysts think National Express Group will earn in the future (free profit forecasts).
A Different Perspective
We regret to report that National Express Group shareholders are down 29% for the year. Unfortunately, that's worse than the broader market decline of 23%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with National Express Group , and understanding them should be part of your investment process.
National Express Group 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 GB exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
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