If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the long term shareholders of Banque Profil de Gestion SA (VTX:BPDG) have had an unfortunate run in the last three years. So they might be feeling emotional about the 62% share price collapse, in that time. And more recent buyers are having a tough time too, with a drop of 52% in the last year. Shareholders have had an even rougher run lately, with the share price down 29% in the last 90 days.
Given that Banque Profil de Gestion didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. When a company doesn’t make profits, we’d generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years, Banque Profil de Gestion saw its revenue grow by 15% per year, compound. That’s a fairly respectable growth rate. That contrasts with the weak share price, which has fallen 28% compounded, over three years. To be frank we’re surprised to see revenue growth and share price growth diverge so strongly. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
Take a more thorough look at Banque Profil de Gestion’s financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
Investors should note that there’s a difference between Banque Profil de Gestion’s total shareholder return (TSR) and its share price change, which we’ve covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Banque Profil de Gestion hasn’t been paying dividends, but its TSR of -60% exceeds its share price return of -62%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
Investors in Banque Profil de Gestion had a tough year, with a total loss of 52%, against a market gain of about 1.6%. 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. Longer term investors wouldn’t be so upset, since they would have made 2.0%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. For example, we’ve discovered 4 warning signs for Banque Profil de Gestion (1 doesn’t sit too well with us!) that you should be aware of before investing here.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CH 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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