As an investor, mistakes are inevitable. But you have a problem if you face massive losses more than once in a while. So spare a thought for the long term shareholders of Lite Access Technologies Inc. (CVE:LTE); the share price is down a whopping 93% in the last three years. That’d be enough to cause even the strongest minds some disquiet. And over the last year the share price fell 84%, so we doubt many shareholders are delighted. On top of that, the share price has dropped a further 50% in a month. This could be related to the recent financial results – you can catch up on the most recent data by reading our company report.
We really feel for shareholders in this scenario. It’s a good reminder of the importance of diversification, and it’s worth keeping in mind there’s more to life than money, anyway.
Lite Access Technologies isn’t a profitable company, so 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last three years, Lite Access Technologies saw its revenue grow by 9.7% per year, compound. That’s a pretty good rate of top-line growth. So it seems unlikely the 59% share price drop (each year) is entirely about the revenue. It could be that the losses were much larger than expected. If you buy into companies that lose money then you always risk losing money yourself. Just don’t lose the lesson.
This free interactive report on Lite Access Technologies’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
The last twelve months weren’t great for Lite Access Technologies shares, which cost holders 84%, while the market was up about 3.1%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 59% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Warren Buffett famously said he likes to ‘buy when there is blood on the streets’, he also focusses on high quality stocks with solid prospects. Before spending more time on Lite Access Technologies it might be wise to click here to see if insiders have been buying or selling shares.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
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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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. Thank you for reading.