Amigo Holdings PLC (LON:AMGO) shareholders will doubtless be very grateful to see the share price up 63% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 31% in a year, falling short of the returns you could get by investing in an index fund.
Because Amigo Holdings 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. 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.
In just one year Amigo Holdings saw its revenue fall by 26%. That's not what investors generally want to see. The stock price has languished lately, falling 31% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Amigo Holdings stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Given that the market gained 28% in the last year, Amigo Holdings shareholders might be miffed that they lost 31%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 63% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand Amigo Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for Amigo Holdings that you should be aware of before investing here.
Amigo Holdings is not the only stock that insiders are buying. 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 GB 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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