Yahoo Finance If You Had Bought Newmark Security (LON:NWT) Stock Five Years Ago, You'd Be Sitting On A 60% Loss, Today
Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. For example the Newmark Security plc (LON:NWT) share price dropped 60% over five years. That's an unpleasant experience for long term holders. More recently, the share price has dropped a further 19% in a month. However, we note the price may have been impacted by the broader market, which is down 32% in the same time period.
View our latest analysis for Newmark Security
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During five years of share price growth, Newmark Security moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics might give us a better handle on how its value is changing over time.
It could be that the revenue decline of 5.3% per year is viewed as evidence that Newmark Security is shrinking. That could explain the weak share price.
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 Newmark Security's financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Newmark Security's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Newmark Security's TSR, which was a 57% drop over the last 5 years, was not as bad as the share price return.
A Different Perspective
It's good to see that Newmark Security has rewarded shareholders with a total shareholder return of 39% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 15% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Newmark Security better, we need to consider many other factors. Take risks, for example - Newmark Security has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.
But note: Newmark Security 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.
