Yahoo Finance Investors in Remsense Technologies (ASX:REM) from a year ago are still down 49%, even after 16% gain this past week
Remsense Technologies Limited (ASX:REM) shareholders should be happy to see the share price up 22% in the last month. But that is minimal compensation for the share price under-performance over the last year. The cold reality is that the stock has dropped 60% in one year, under-performing the market.
On a more encouraging note the company has added AU$495k to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
Check out our latest analysis for Remsense Technologies
Because Remsense Technologies 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Remsense Technologies' revenue didn't grow at all in the last year. In fact, it fell 24%. That's not what investors generally want to see. The share price drop of 60% is understandable given the company doesn't have profits to boast of. Fingers crossed this is the low ebb for the stock. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
If you are thinking of buying or selling Remsense Technologies stock, you should check out this FREE detailed report on its balance sheet.
What About The Total Shareholder Return (TSR)?
We've already covered Remsense Technologies' share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that Remsense Technologies' TSR, at -49% is higher than its share price return of -60%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
While Remsense Technologies shareholders are down 49% for the year, the market itself is up 13%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 12% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 5 warning signs we've spotted with Remsense Technologies (including 4 which are a bit concerning) .
Of course Remsense Technologies may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian 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.
