Yahoo Finance Those Who Purchased H2O Innovation Shares Five Years Ago Have A 61% Loss To Show For It
Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don’t succeed. To wit, the H2O Innovation Inc. (CVE:HEO) share price managed to fall 61% over five long years. That’s not a lot of fun for true believers. And it’s not just long term holders hurting, because the stock is down 34% in the last year. The falls have accelerated recently, with the share price down 13% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Check out our latest analysis for H2O Innovation
Given that H2O Innovation 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. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over five years, H2O Innovation grew its revenue at 25% per year. That’s well above most other pre-profit companies. Unfortunately for shareholders the share price has dropped 17% per year – disappointing considering the growth. It’s safe to say investor expectations are more grounded now. Given the revenue growth we’d consider the stock to be quite an interesting prospect if the company has a clear path to profitability.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling H2O Innovation stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
H2O Innovation shareholders are down 34% for the year, but the market itself is up 4.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 17% 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. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of H2O Innovation by clicking this link.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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.
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. Thank you for reading.
