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Seritage Growth Properties (NYSE:SRG shareholders incur further losses as stock declines 7.7% this week, taking five-year losses to 66%

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  • SRG
  • SRG-PA

Generally speaking long term investing is the way to go. But along the way some stocks are going to perform badly. For example the Seritage Growth Properties (NYSE:SRG) share price dropped 68% over five years. That's an unpleasant experience for long term holders. On top of that, the share price is down 7.7% in the last week. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

Since Seritage Growth Properties has shed US$57m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Seritage Growth Properties

Seritage Growth Properties isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over half a decade Seritage Growth Properties reduced its trailing twelve month revenue by 20% for each year. That's definitely a weaker result than most pre-profit companies report. It seems appropriate, then, that the share price slid about 11% annually during that time. It's fair to say most investors don't like to invest in loss making companies with falling revenue. You'd want to research this company pretty thoroughly before buying, it looks a bit too risky for us.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
earnings-and-revenue-growth

This free interactive report on Seritage Growth Properties' balance sheet strength is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Seritage Growth Properties' total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Seritage Growth Properties' TSR, which was a 66% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

Seritage Growth Properties shareholders gained a total return of 12% during the year. But that return falls short of the market. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 11% endured over half a decade. So this might be a sign the business has turned its fortunes around. 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. For example, we've discovered 3 warning signs for Seritage Growth Properties (2 are concerning!) that you should be aware of before investing here.

If you are like me, then you will 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 US exchanges.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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