Yahoo Finance Investors ignore increasing losses at Clear Channel Outdoor Holdings (NYSE:CCO) as stock jumps 4.8% this past week
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Clear Channel Outdoor Holdings, Inc. (NYSE:CCO) share price has soared 135% in the last 1 year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 20% in about a quarter. Zooming out, the stock is actually down 40% in the last three years.
Since the stock has added US$71m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
See our latest analysis for Clear Channel Outdoor Holdings
Given that Clear Channel Outdoor Holdings 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. 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.
Clear Channel Outdoor Holdings actually shrunk its revenue over the last year, with a reduction of 0.9%. So we would not have expected the share price to rise 135%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
It's good to see that Clear Channel Outdoor Holdings has rewarded shareholders with a total shareholder return of 135% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 3% 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 Clear Channel Outdoor Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for Clear Channel Outdoor Holdings (1 doesn't sit too well with us!) that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
