If You Had Bought Namaste Technologies' (CVE:N) Shares Three Years Ago You Would Be Down 89%

Namaste Technologies Inc. (CVE:N) shareholders will doubtless be very grateful to see the share price up 49% in the last month. But the last three years have seen a terrible decline. In that time the share price has melted like a snowball in the desert, down 89%. So it's about time shareholders saw some gains. Of course the real question is whether the business can sustain a turnaround.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

View our latest analysis for Namaste Technologies

Namaste Technologies 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years, Namaste Technologies saw its revenue grow by 11% per year, compound. That's a fairly respectable growth rate. So it seems unlikely the 24% share price drop (each year) is entirely about the revenue. More likely, the market was spooked by the cost of that revenue. If you buy into companies that lose money then you always risk losing money yourself. Just don't lose the lesson.

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

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

A Different Perspective

Over the last year, Namaste Technologies shareholders took a loss of 24%. In contrast the market gained about 5.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. However, the loss over the last year isn't as bad as the 24% per annum loss investors have suffered over the last three years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 5 warning signs with Namaste Technologies (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

We will like Namaste Technologies better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

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