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Even the best investor on earth makes unsuccessful investments. But serious investors should think long and hard about avoiding extreme losses. It must have been painful to be a Gayatri Highways Limited (NSE:GAYAHWS) shareholder over the last year, since the stock price plummeted 93% in that time. A loss like this is a stark reminder that portfolio diversification is important. We wouldn't rush to judgement on Gayatri Highways because we don't have a long term history to look at. But it's up 7.1% in the last week.
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 Gayatri Highways
Given that Gayatri Highways didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In just one year Gayatri Highways saw its revenue fall by 53%. 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 93%). Our mindset doesn't have a lot of time for stocks like this. While some losers redeem themselves, most remain losers and we prefer winners anyway.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Gayatri Highways's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Given that the market gained 3.5% in the last year, Gayatri Highways shareholders might be miffed that they lost 93%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 6.3% 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. You could get a better understanding of Gayatri Highways's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.