Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the Baltic Classifieds Group PLC (LON:BCG) share price is down 33% in the last year. That's well below the market decline of 5.2%. Baltic Classifieds Group hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 20% in the last three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

View our latest analysis for Baltic Classifieds Group

We don't think that Baltic Classifieds Group's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year Baltic Classifieds Group saw its revenue grow by 21%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 33%. You might even wonder if the share price was previously over-hyped. However, that's in the past now, and it's the future that matters most.

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for Baltic Classifieds Group in this interactive graph of future profit estimates.

A Different Perspective

We doubt Baltic Classifieds Group shareholders are happy with the loss of 33% over twelve months. That falls short of the market, which lost 5.2%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 20% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Baltic Classifieds Group you should be aware of.