Jammu and Kashmir Bank's (NSE:J&KBANK) Stock Price Has Reduced 84% In The Past Five Years

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. For example, we sympathize with anyone who was caught holding The Jammu and Kashmir Bank Limited (NSE:J&KBANK) during the five years that saw its share price drop a whopping 84%. And it's not just long term holders hurting, because the stock is down 50% in the last year. More recently, the share price has dropped a further 17% in a month.

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.

View our latest analysis for Jammu and Kashmir Bank

Because Jammu and Kashmir Bank 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over five years, Jammu and Kashmir Bank grew its revenue at 6.4% per year. That's a fairly respectable growth rate. So the stock price fall of 13% per year seems pretty steep. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Jammu and Kashmir Bank stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 7.0% in the last year, Jammu and Kashmir Bank shareholders lost 50%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 13% 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. It's always interesting to track share price performance over the longer term. But to understand Jammu and Kashmir Bank better, we need to consider many other factors. Take risks, for example - Jammu and Kashmir Bank has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

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 IN exchanges.

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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. 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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