Can You Imagine How RNI Negócios Imobiliários' (BVMF:RDNI3) Shareholders Feel About The 86% Share Price Increase?

RNI Negócios Imobiliários S.A. (BVMF:RDNI3) shareholders might be concerned after seeing the share price drop 17% in the last quarter. But the silver lining is the stock is up over five years. Unfortunately its return of 86% is below the market return of 145%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 24% drop, in the last year.

View our latest analysis for RNI Negócios Imobiliários

Because RNI Negócios Imobiliários 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. Shareholders of unprofitable companies usually expect strong 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 half decade RNI Negócios Imobiliários' revenue has actually been trending down at about 16% per year. The stock is only up 13% for each year during the period. That's pretty decent given the top line decline, and lack of profits. We'd keep an eye on changes in the trend - there may be an opportunity if the company returns to growth.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between RNI Negócios Imobiliários' 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. Dividends have been really beneficial for RNI Negócios Imobiliários shareholders, and that cash payout contributed to why its TSR of 94%, over the last 5 years, is better than the share price return.

A Different Perspective

RNI Negócios Imobiliários shareholders are down 24% for the year, but the market itself is up 19%. 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 14%, 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. Even so, be aware that RNI Negócios Imobiliários is showing 2 warning signs in our investment analysis , you should know about...

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 BR 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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