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If you love investing in stocks you're bound to buy some losers. But long term Coral Products plc (LON:CRU) shareholders have had a particularly rough ride in the last three year. Unfortunately, they have held through a 72% decline in the share price in that time. And over the last year the share price fell 38%, so we doubt many shareholders are delighted. Furthermore, it's down 45% in about a quarter. That's not much fun for holders.
View our latest analysis for Coral Products
While Coral Products made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
In the last three years, Coral Products saw its revenue grow by 11% per year, compound. That's a fairly respectable growth rate. So it's hard to believe the share price decline of 35% per year is due to the revenue. It could be that the losses were much larger than expected. If you buy into companies that lose money then you always risk losing money yourself. Just don't lose the lesson.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Coral Products's earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Coral Products, it has a TSR of -68% for the last 3 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.