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DEMIRE Deutsche Mittelstand Real Estate AG (ETR:DMRE) shareholders should be happy to see the share price up 15% in the last week. But that doesn't change the fact that the returns over the last half decade have been stomach churning. In fact, the share price has tumbled down a mountain to land 85% lower after that period. The recent bounce might mean the long decline is over, but we are not confident. The important question is if the business itself justifies a higher share price in the long term. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
While the stock has risen 15% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
See our latest analysis for DEMIRE Deutsche Mittelstand Real Estate
Because DEMIRE Deutsche Mittelstand Real Estate made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
In the last five years DEMIRE Deutsche Mittelstand Real Estate saw its revenue shrink by 2.7% per 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. We're generally averse to companies with declining revenues, but we're not alone in that. Fear of becoming a 'bagholder' may be keeping people away from this stock.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
What About The Total Shareholder Return (TSR)?
We've already covered DEMIRE Deutsche Mittelstand Real Estate'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. Its history of dividend payouts mean that DEMIRE Deutsche Mittelstand Real Estate's TSR, which was a 79% drop over the last 5 years, was not as bad as the share price return.