The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For instance the Centric Holdings S.A. (ATH:CENTR) share price is 158% higher than it was three years ago. Most would be happy with that. In more good news, the share price has risen 1.2% in thirty days. But this could be related to good market conditions — stocks in its market are up 4.2% in the last month.
Because Centric Holdings 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. 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.
Centric Holdings actually saw its revenue drop by 85% per year over three years. So we wouldn’t have expected the share price to gain 37% per year, but it has. It’s a good reminder that expectations about the future, not the past history, always impact share prices.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Centric Holdings’s financial health with this free report on its balance sheet.
A Different Perspective
It’s good to see that Centric Holdings has rewarded shareholders with a total shareholder return of 71% in the last twelve months. That gain is better than the annual TSR over five years, which is 9.1%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It’s always interesting to track share price performance over the longer term. But to understand Centric Holdings better, we need to consider many other factors. For example, we’ve discovered 4 warning signs for Centric Holdings (1 is a bit unpleasant!) that you should be aware of before investing here.
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 GR exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.
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