Yahoo Finance The past year for CT Automotive Group (LON:CTA) investors has not been profitable
The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the CT Automotive Group plc (LON:CTA) share price slid 41% over twelve months. That contrasts poorly with the market decline of 5.7%. Because CT Automotive Group hasn't been listed for many years, the market is still learning about how the business performs. The falls have accelerated recently, with the share price down 24% in the last three months.
Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.
View our latest analysis for CT Automotive Group
Because CT Automotive 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
CT Automotive Group's revenue didn't grow at all in the last year. In fact, it fell 4.8%. That's not what investors generally want to see. Shareholders have seen the share price drop 41% in that time. What would you expect when revenue is falling, and it doesn't make a profit? We think most holders must believe revenue growth will improve, or else costs will decline.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at CT Automotive Group's financial health with this free report on its balance sheet.
A Different Perspective
We doubt CT Automotive Group shareholders are happy with the loss of 41% over twelve months. That falls short of the market, which lost 5.7%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 24% over the last three months, the market doesn't seem to believe that the company has solved all its problems. 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. Take risks, for example - CT Automotive Group has 3 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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.
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