Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. Zooming in on an example, the Pharos Energy plc (LON:PHAR) share price dropped 61% in the last half decade. We certainly feel for shareholders who bought near the top.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

View our latest analysis for Pharos Energy

Pharos Energy isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last half decade, Pharos Energy saw its revenue increase by 0.2% per year. That's far from impressive given all the money it is losing. It's likely this weak growth has contributed to an annualised return of 10% for the last five years. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Pharos Energy. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Pharos Energy's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Pharos Energy's TSR for the last 5 years was -57%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Pharos Energy shareholders have received a total shareholder return of 15% over the last year. That's including the dividend. Notably the five-year annualised TSR loss of 9% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Pharos Energy .