Emirates Reem Investments Company P.J.S.C (DFM:ERC) adds د.إ179m to market cap in the past 7 days, though investors from three years ago are still down 64%

It's nice to see the Emirates Reem Investments Company P.J.S.C (DFM:ERC) share price up 23% in a week. But that is small recompense for the exasperating returns over three years. In that time, the share price dropped 64%. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

While the stock has risen 23% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Emirates Reem Investments Company P.J.S.C

Given that Emirates Reem Investments Company P.J.S.C only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last three years, Emirates Reem Investments Company P.J.S.C saw its revenue grow by 43% per year, compound. That is faster than most pre-profit companies. The share price has moved in quite the opposite direction, down 18% over that time, a bad result. This could mean hype has come out of the stock because the losses are concerning investors. But a share price drop of that magnitude could well signal that the market is overly negative on the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Investors in Emirates Reem Investments Company P.J.S.C had a tough year, with a total loss of 16%, against a market gain of about 0.2%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 2%, 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Emirates Reem Investments Company P.J.S.C you should be aware of.

If you are like me, then you will not want to miss this free list of undervalued small caps 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 Emirian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.