Generally speaking long term investing is the way to go. But no-one is immune from buying too high. To wit, the Air New Zealand Limited (NZSE:AIR) share price managed to fall 82% over five long years. We certainly feel for shareholders who bought near the top. And it's not just long term holders hurting, because the stock is down 60% in the last year. Shareholders have had an even rougher run lately, with the share price down 32% in the last 90 days. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for Air New Zealand

Given that Air New Zealand 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. 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.

In the last five years Air New Zealand saw its revenue shrink by 12% per year. That's definitely a weaker result than most pre-profit companies report. So it's not that strange that the share price dropped 13% per year in that period. This kind of price performance makes us very wary, especially when combined with falling revenue. Of course, the poor performance could mean the market has been too severe selling down. That can happen.

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. You can see what analysts are predicting for Air New Zealand in this interactive graph of future profit estimates.

What About The Total Shareholder Return (TSR)?

We've already covered Air New Zealand's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Air New Zealand shareholders, and that cash payout explains why its total shareholder loss of 64%, over the last 5 years, isn't as bad as the share price return.