Shree Renuka Sugars' (NSE:RENUKA) Shareholders Are Down 51% On Their Shares

It is a pleasure to report that the Shree Renuka Sugars Limited (NSE:RENUKA) is up 63% in the last quarter. But that is small recompense for the exasperating returns over three years. Indeed, the share price is down a tragic 51% in the last three years. So it is really good to see an improvement. After all, could be that the fall was overdone.

See our latest analysis for Shree Renuka Sugars

Because Shree Renuka Sugars 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. 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 Shree Renuka Sugars saw its revenue shrink by 36% per year. That means its revenue trend is very weak compared to other loss making companies. Arguably, the market has responded appropriately to this business performance by sending the share price down 15% (annualized) in the same time period. Bagholders or 'baggies' are people who buy more of a stock as the price collapses. They are then left 'holding the bag' if the shares turn out to be worthless. It could be a while before the company repays long suffering shareholders with share price gains.

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

This free interactive report on Shree Renuka Sugars' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Shree Renuka Sugars has rewarded shareholders with a total shareholder return of 11% in the last twelve months. Notably the five-year annualised TSR loss of 0.3% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Shree Renuka Sugars has 1 warning sign we think you should be aware of.

We will like Shree Renuka Sugars better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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