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Investors Who Bought SelfWealth (ASX:SWF) Shares A Year Ago Are Now Down 59%

SelfWealth Limited (ASX:SWF) shareholders should be happy to see the share price up 13% in the last month. But that’s small comfort given the dismal price performance over the last year. Specifically, the stock price slipped by 59% in that time. The share price recovery is not so impressive when you consider the fall. You could argue that the sell-off was too severe.

Check out our latest analysis for SelfWealth

Because SelfWealth is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

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In the last year SelfWealth saw its revenue grow by 491%. That’s well above most other pre-profit companies. Meanwhile, the share price slid 59%. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.

ASX:SWF Income Statement, March 18th 2019
ASX:SWF Income Statement, March 18th 2019

Balance sheet strength is crucual. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

While SelfWealth shareholders are down 59% for the year, the market itself is up 8.0%. 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. Putting aside the last twelve months, it’s good to see the share price has rebounded by 1.4%, in the last ninety days. This could just be a bounce because the selling was too aggressive, but fingers crossed it’s the start of a new trend. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

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 AU 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.