Long term investing works well, but it doesn't always work for each individual stock. It hits us in the gut when we see fellow investors suffer a loss. Imagine if you held Delta Drone SA (EPA:ALDR) for half a decade as the share price tanked 95%. And we doubt long term believers are the only worried holders, since the stock price has declined 72% over the last twelve months. The falls have accelerated recently, with the share price down 14% in the last three months.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
See our latest analysis for Delta Drone
Given that Delta Drone 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last half decade, Delta Drone saw its revenue increase by 39% per year. That's better than most loss-making companies. So on the face of it we're really surprised to see the share price has averaged a fall of 46% each year, in the same time period. You'd have to assume the market is worried that profits won't come soon enough. While there might be an opportunity here, you'd want to take a close look at the balance sheet strength.
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 Delta Drone's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market gained around 7.7% in the last year, Delta Drone shareholders lost 72%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 46% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You could get a better understanding of Delta Drone's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.