Yahoo Finance Investors in Very Good Food (CVE:VERY) have unfortunately lost 86% over the last year
As every investor would know, you don't hit a homerun every time you swing. But serious investors should think long and hard about avoiding extreme losses. It must have been painful to be a The Very Good Food Company Inc. (CVE:VERY) shareholder over the last year, since the stock price plummeted 86% in that time. A loss like this is a stark reminder that portfolio diversification is important. We wouldn't rush to judgement on Very Good Food because we don't have a long term history to look at. The falls have accelerated recently, with the share price down 36% in the last three months. While a drop like that is definitely a body blow, money isn't as important as health and happiness.
So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.
See our latest analysis for Very Good Food
Given that Very Good Food 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last twelve months, Very Good Food increased its revenue by 213%. That's a strong result which is better than most other loss making companies. So on the face of it we're really surprised to see the share price down 86% over twelve months. There's clearly something unusual going on here such as an acquisition that hasn't delivered expected profits. What is clear is that the market is not judging the company on its revenue growth right now. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Very Good Food stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While Very Good Food shareholders are down 86% for the year, the market itself is up 21%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 36%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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 5 warning signs we've spotted with Very Good Food (including 2 which are a bit unpleasant) .
We will like Very Good Food better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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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.
