It's not a secret that every investor will make bad investments, from time to time. But it's not unreasonable to try to avoid truly shocking capital losses. We wouldn't blame CMM Infraprojects Limited (NSE:CMMIPL) shareholders if they were still in shock after the stock dropped like a lead balloon, down 85% in just one year. That'd be enough to make even the strongest stomachs churn. We wouldn't rush to judgement on CMM Infraprojects because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 54% in the last three months. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
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.
See our latest analysis for CMM Infraprojects
While CMM Infraprojects made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. 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 just one year CMM Infraprojects saw its revenue fall by 58%. That looks like a train-wreck result to investors far and wide. If you need more proof of that, check the share price. (Hint: it tanked 85%). This kind of performance makes us wary, and usually gives us reason to forget about a stock. While some losers redeem themselves, most remain losers and we prefer winners anyway.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
CMM Infraprojects shareholders are down 85% for the year, even worse than the market loss of 9.5%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 54%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Before forming an opinion on CMM Infraprojects you might want to consider these 3 valuation metrics.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.