If You Had Bought Mosaic Brands' (ASX:MOZ) Shares A Year Ago You Would Be Down 68%

It is a pleasure to report that the Mosaic Brands Limited (ASX:MOZ) is up 65% in the last quarter. But that doesn't change the fact that the returns over the last year have been disappointing. Like a receding glacier in a warming world, the share price has melted 68% in that period. It's not that amazing to see a bounce after a drop like that. You could argue that the sell-off was too severe.

Check out our latest analysis for Mosaic Brands

Mosaic Brands 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Mosaic Brands' revenue didn't grow at all in the last year. In fact, it fell 17%. That looks pretty grim, at a glance. In the absence of profits, it's not unreasonable that the share price fell 68%. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

If you are thinking of buying or selling Mosaic Brands stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Mosaic Brands shareholders are down 68% for the year, but the market itself is up 0.2%. 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 1.3% 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. 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. For example, we've discovered 3 warning signs for Mosaic Brands that you should be aware of before investing here.

But note: Mosaic Brands may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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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