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Introducing Capstone Mining (TSE:CS), The Stock That Slid 62% In The Last Five Years

Simply Wall St

Capstone Mining Corp. (TSE:CS) shareholders will doubtless be very grateful to see the share price up 40% in the last quarter. But that doesn't change the fact that the returns over the last half decade have been disappointing. In that time the share price has delivered a rude shock to holders, who find themselves down 62% after a long stretch. So we're not so sure if the recent bounce should be celebrated. Of course, this could be the start of a turnaround.

View our latest analysis for Capstone Mining

Given that Capstone Mining 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade Capstone Mining reduced its trailing twelve month revenue by 7.4% for each year. That's not what investors generally want to see. The share price decline of 18% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. The chance of imminent investor enthusiasm for this stock seems slimmer than Louise Brooks. Not that many investors like to invest in companies that are losing money and not growing revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

TSX:CS Income Statement, December 31st 2019

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So it makes a lot of sense to check out what analysts think Capstone Mining will earn in the future (free profit forecasts).

A Different Perspective

It's nice to see that Capstone Mining shareholders have received a total shareholder return of 26% over the last year. There's no doubt those recent returns are much better than the TSR loss of 18% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

There are plenty of other companies that have insiders buying up shares. You probably do 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.