Yahoo Finance Those Who Purchased Location Sciences Group (LON:LSAI) Shares Five Years Ago Have A 99% Loss To Show For It
We're definitely into long term investing, but some companies are simply bad investments over any time frame. It hits us in the gut when we see fellow investors suffer a loss. Imagine if you held Location Sciences Group PLC (LON:LSAI) for half a decade as the share price tanked 99%. And we doubt long term believers are the only worried holders, since the stock price has declined 38% over the last twelve months. Shareholders have had an even rougher run lately, with the share price down 42% in the last 90 days.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
See our latest analysis for Location Sciences Group
Location Sciences Group 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over half a decade Location Sciences Group reduced its trailing twelve month revenue by 14% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 63% per year in that period. This kind of price performance makes us very wary, especially when combined with falling revenue. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.
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 Location Sciences Group stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Investors in Location Sciences Group had a tough year, with a total loss of 38%, against a market gain of about 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 63% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. If you would like to research Location Sciences Group in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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.
