It is doubtless a positive to see that the Salmat Limited (ASX:SLM) share price has gained some 59% in the last three months. But that doesn't change the fact that the returns over the last five years have been less than pleasing. In fact, the share price is down 47%, which falls well short of the return you could get by buying an index fund.

See our latest analysis for Salmat

Because Salmat 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 expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over half a decade Salmat reduced its trailing twelve month revenue by 17% for each year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 12% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. It is possible for businesses to bounce back but as Buffett says, 'turnarounds seldom turn'.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. It might be well worthwhile taking a look at our free report on Salmat's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Salmat's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Salmat shareholders, and that cash payout explains why its total shareholder loss of 30%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

It's good to see that Salmat has rewarded shareholders with a total shareholder return of 60% in the last twelve months. Notably the five-year annualised TSR loss of 6.8% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Salmat better, we need to consider many other factors. For instance, we've identified 2 warning signs for Salmat that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

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