In This Article:
Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example the Brøndbyernes IF Fodbold A/S (CPH:BIF) share price dropped 73% over five years. That's not a lot of fun for true believers. And some of the more recent buyers are probably worried, too, with the stock falling 42% in the last year. The good news is that the stock is up 1.0% in the last week.
View our latest analysis for Brøndbyernes IF Fodbold
Brøndbyernes IF Fodbold isn't a profitable company, so it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over five years, Brøndbyernes IF Fodbold grew its revenue at 9.1% per year. That's a fairly respectable growth rate. So the stock price fall of 23% per year seems pretty steep. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Brøndbyernes IF Fodbold stock, you should check out this FREE detailed report on its balance sheet.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Brøndbyernes IF Fodbold's total shareholder return (TSR) and its share price change, which we've covered above. 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. We note that Brøndbyernes IF Fodbold's TSR, at -67% is higher than its share price return of -73%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
While the broader market gained around 8.7% in the last year, Brøndbyernes IF Fodbold shareholders lost 42%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 20% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.