Yahoo Finance Investors one-year losses grow to 35% as the stock sheds US$11m this past week
Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Ceres Global Ag Corp. (TSE:CRP) share price slid 35% over twelve months. That contrasts poorly with the market decline of 1.9%. However, the longer term returns haven't been so bad, with the stock down 21% in the last three years. More recently, the share price has dropped a further 16% in a month. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Since Ceres Global Ag has shed US$11m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.
See our latest analysis for Ceres Global Ag
Because Ceres Global Ag 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Ceres Global Ag saw its revenue grow by 42%. That's definitely a respectable growth rate. Meanwhile, the share price is down 35% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. However, that's in the past now, and it's the future that matters most.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Ceres Global Ag's financial health with this free report on its balance sheet.
A Different Perspective
While the broader market lost about 1.9% in the twelve months, Ceres Global Ag shareholders did even worse, losing 35%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. We realise that Baron Rothschild 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. It's always interesting to track share price performance over the longer term. But to understand Ceres Global Ag better, we need to consider many other factors. For instance, we've identified 1 warning sign for Ceres Global Ag that you should be aware of.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.
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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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