Yahoo Finance Did Changing Sentiment Drive City of London Group's (LON:CIN) Share Price Down By 14%?
The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the City of London Group plc (LON:CIN) share price is down 14% in the last year. That contrasts poorly with the market return of 13%. Because City of London Group hasn't been listed for many years, the market is still learning about how the business performs. Even worse, it's down 11% in about a month, which isn't fun at all.
View our latest analysis for City of London Group
Because City of London Group 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
City of London Group's revenue didn't grow at all in the last year. In fact, it fell 1.9%. That looks pretty grim, at a glance. The stock price has languished lately, falling 14% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at City of London Group's financial health with this free report on its balance sheet.
A Different Perspective
While City of London Group shareholders are down 14% for the year, the market itself is up 13%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 9.4% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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 learn about the 4 warning signs we've spotted with City of London Group (including 2 which is are concerning) .
But note: City of London Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
