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We're definitely into long term investing, but some companies are simply bad investments over any time frame. It hits us in the gut when we see fellow investors suffer a loss. Anyone who held Yoma Strategic Holdings Ltd. (SGX:Z59) for five years would be nursing their metaphorical wounds since the share price dropped 84% in that time. And some of the more recent buyers are probably worried, too, with the stock falling 34% in the last year. Furthermore, it's down 35% in about a quarter. That's not much fun for holders. We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Yoma Strategic Holdings
Because Yoma Strategic Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 five years Yoma Strategic Holdings saw its revenue shrink by 0.3% per year. That's not what investors generally want to see. If a business loses money, you want it to grow, so no surprises that the share price has dropped 13% each year in that time. We're generally averse to companies with declining revenues, but we're not alone in that. Fear of becoming a 'bagholder' may be keeping people away from this stock.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Dive deeper into the earnings by checking this interactive graph of Yoma Strategic Holdings' earnings, revenue and cash flow.
A Different Perspective
While the broader market lost about 3.2% in the twelve months, Yoma Strategic Holdings shareholders did even worse, losing 34%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 13% 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. It's always interesting to track share price performance over the longer term. But to understand Yoma Strategic Holdings better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Yoma Strategic Holdings you should be aware of.