Yahoo Finance The past five years for Intrepid Potash (NYSE:IPI) investors has not been profitable
The main aim of stock picking is to find the market-beating stocks. But the main game is to find enough winners to more than offset the losers So we wouldn't blame long term Intrepid Potash, Inc. (NYSE:IPI) shareholders for doubting their decision to hold, with the stock down 44% over a half decade. And we doubt long term believers are the only worried holders, since the stock price has declined 21% over the last twelve months.
It's worthwhile assessing if the company's economics have been moving in lockstep with these underwhelming shareholder returns, or if there is some disparity between the two. So let's do just that.
See our latest analysis for Intrepid Potash
Intrepid Potash wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last half decade, Intrepid Potash saw its revenue increase by 13% per year. That's a pretty good rate for a long time period. We doubt many shareholders are ok with the fact the share price has fallen 8% each year for half a decade. Clearly, the expectations from back then have not been satisfied. There is always a big risk of losing money yourself when you buy shares in a company that loses money.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Intrepid Potash's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Intrepid Potash shareholders are down 21% for the year, but the market itself is up 28%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
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 American 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.
