What Type Of Returns Would Union Insurance Company P.J.S.C's(ADX:UNION) Shareholders Have Earned If They Purchased Their SharesThree Years Ago?

While it may not be enough for some shareholders, we think it is good to see the Union Insurance Company P.J.S.C. (ADX:UNION) share price up 27% in a single quarter. But that is small recompense for the exasperating returns over three years. Tragically, the share price declined 64% in that time. So it is really good to see an improvement. After all, could be that the fall was overdone.

Check out our latest analysis for Union Insurance Company P.J.S.C

Union Insurance Company P.J.S.C wasn't profitable in the last twelve months, 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last three years, Union Insurance Company P.J.S.C's revenue dropped 8.7% per year. That is not a good result. The share price decline of 18% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. We'd be pretty wary of this one until it makes a profit, because we don't specialize in finding turnaround situations.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

While the broader market gained around 9.2% in the last year, Union Insurance Company P.J.S.C shareholders lost 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Union Insurance Company P.J.S.C , and understanding them should be part of your investment process.

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 AE exchanges.

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