Australia markets closed
  • ALL ORDS

    7,700.40
    -9.10 (-0.12%)
     
  • AUD/USD

    0.7076
    -0.0030 (-0.43%)
     
  • ASX 200

    7,481.70
    -12.10 (-0.16%)
     
  • OIL

    79.18
    -0.50 (-0.63%)
     
  • GOLD

    1,938.80
    -6.80 (-0.35%)
     
  • BTC-AUD

    32,973.85
    -28.29 (-0.09%)
     
  • CMC Crypto 200

    528.08
    +11.08 (+2.14%)
     

Investors in Helios Towers (LON:HTWS) have unfortunately lost 38% over the last year

The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Helios Towers plc (LON:HTWS) share price is down 38% in the last year. That contrasts poorly with the market decline of 13%. At least the damage isn't so bad if you look at the last three years, since the stock is down 15% in that time. Shareholders have had an even rougher run lately, with the share price down 25% in the last 90 days.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Helios Towers

Helios Towers wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

In the last year Helios Towers saw its revenue grow by 19%. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 38%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

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

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free report showing analyst forecasts should help you form a view on Helios Towers

A Different Perspective

Helios Towers shareholders are down 38% for the year, falling short of the market return. The market shed around 13%, no doubt weighing on the stock price. Shareholders have lost 5% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. Before spending more time on Helios Towers it might be wise to click here to see if insiders have been buying or selling shares.

We will like Helios Towers better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here