Advertisement
Australia markets open in 9 hours 11 minutes
  • ALL ORDS

    7,937.90
    +35.90 (+0.45%)
     
  • AUD/USD

    0.6483
    +0.0032 (+0.50%)
     
  • ASX 200

    7,683.50
    +34.30 (+0.45%)
     
  • OIL

    82.23
    +0.33 (+0.40%)
     
  • GOLD

    2,333.80
    -12.60 (-0.54%)
     
  • Bitcoin AUD

    102,937.02
    +618.36 (+0.60%)
     
  • CMC Crypto 200

    1,441.75
    +26.99 (+1.91%)
     

LEONI (ETR:LEO) investors are sitting on a loss of 88% if they invested five years ago

Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We really hate to see fellow investors lose their hard-earned money. For example, we sympathize with anyone who was caught holding LEONI AG (ETR:LEO) during the five years that saw its share price drop a whopping 88%. We also note that the stock has performed poorly over the last year, with the share price down 50%. The falls have accelerated recently, with the share price down 10% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 8.8% in the same timeframe. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.

Check out our latest analysis for LEONI

Given that LEONI 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

ADVERTISEMENT

Over half a decade LEONI reduced its trailing twelve month revenue by 1.7% for each year. That's not what investors generally want to see. The share price fall of 13% (per year, over five years) is a stern reminder that money-losing companies are expected to grow revenue. It takes a certain kind of mental fortitude (or recklessness) to buy shares in a company that loses money and doesn't grow revenue. Fear of becoming a 'bagholder' may be keeping people away from this stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

Take a more thorough look at LEONI's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 24% in the twelve months, LEONI shareholders did even worse, losing 50%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 13% 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

We will like LEONI 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 DE 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