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Those Who Purchased Pioneering Technology (CVE:PTE) Shares Three Years Ago Have A 97% Loss To Show For It

Pioneering Technology Corp. (CVE:PTE) shareholders should be happy to see the share price up 17% in the last week. But that doesn't change the fact that the returns over the last three years have been stomach churning. The share price has sunk like a leaky ship, down 97% in that time. So it's about time shareholders saw some gains. But the more important question is whether the underlying business can justify a higher price still.

We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.

View our latest analysis for Pioneering Technology

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Given that Pioneering Technology 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over the last three years, Pioneering Technology's revenue dropped 27% per year. That means its revenue trend is very weak compared to other loss making companies. The swift share price decline at an annual compound rate of 70%, reflects this weak fundamental performance. Never forget that loss making companies with falling revenue can and do cause losses for everyday investors. It's worth remembering that investors call buying a steeply falling share price 'catching a falling knife' because it is a dangerous pass time.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

TSXV:PTE Income Statement, February 6th 2020
TSXV:PTE Income Statement, February 6th 2020

If you are thinking of buying or selling Pioneering Technology stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Pioneering Technology shareholders are down 65% for the year, but the market itself is up 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 23% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Pioneering Technology better, we need to consider many other factors. Be aware that Pioneering Technology is showing 5 warning signs in our investment analysis , and 3 of those shouldn't be ignored...

But note: Pioneering Technology may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.