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Those Who Purchased Panariagroup Industrie Ceramiche (BIT:PAN) Shares Three Years Ago Have A 59% Loss To Show For It

Investing in stocks inevitably means buying into some companies that perform poorly. But long term Panariagroup Industrie Ceramiche S.p.A. (BIT:PAN) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 59% decline in the share price in that time.

Check out our latest analysis for Panariagroup Industrie Ceramiche

Panariagroup Industrie Ceramiche isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 three years, Panariagroup Industrie Ceramiche grew revenue at 0.3% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. It's likely this weak growth has contributed to an annualised return of 25% for the last three years. It can be well worth keeping an eye on growth stocks that disappoint the market, because sometimes they re-accelerate. Keep in mind it isn't unusual for good businesses to have a tough time or a couple of uninspiring years.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

BIT:PAN Income Statement, January 21st 2020
BIT:PAN Income Statement, January 21st 2020

This free interactive report on Panariagroup Industrie Ceramiche's 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've already covered Panariagroup Industrie Ceramiche's 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. Dividends have been really beneficial for Panariagroup Industrie Ceramiche shareholders, and that cash payout explains why its total shareholder loss of 57%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

Investors in Panariagroup Industrie Ceramiche had a tough year, with a total loss of 3.0%, against a market gain of about 22%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 3.7%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Panariagroup Industrie Ceramiche (of which 1 can't be ignored!) you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IT 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.