Grupo SBF's (BVMF:CNTO3) Shareholders Are Down 12% On Their Shares

The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Grupo SBF S.A. (BVMF:CNTO3) share price is down 12% in the last year. That contrasts poorly with the market return of 5.2%. Because Grupo SBF hasn't been listed for many years, the market is still learning about how the business performs. The share price has dropped 13% in three months. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

View our latest analysis for Grupo SBF

Given that Grupo SBF only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In just one year Grupo SBF saw its revenue fall by 11%. That's not what investors generally want to see. Shareholders have seen the share price drop 12% in that time. What would you expect when revenue is falling, and it doesn't make a profit? It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Grupo SBF's financial health with this free report on its balance sheet.

A Different Perspective

Given that the market gained 5.2% in the last year, Grupo SBF shareholders might be miffed that they lost 12%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's worth noting that the last three months did the real damage, with a 13% decline. So it seems like some holders have been dumping the stock of late - and that's not bullish. It's always interesting to track share price performance over the longer term. But to understand Grupo SBF better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Grupo SBF you should know about.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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