Reflecting on Amigo Holdings' (LON:AMGO) Share Price Returns Over The Last Year

Amigo Holdings PLC (LON:AMGO) has rebounded strongly over the last week, with the share price soaring 40%. But that isn't much consolation for the painful drop we've seen in the last year. During that time the share price has plummeted like a stone, down 81%. It's not uncommon to see a bounce after a drop like that. The important thing is whether the company can turn it around, longer term.

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 Amigo Holdings

Amigo Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good 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.

In just one year Amigo Holdings saw its revenue fall by 16%. That looks pretty grim, at a glance. The share price fall of 81% in a year tells the story. Holders should not lose the lesson: loss making companies should grow revenue. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.

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. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

We doubt Amigo Holdings shareholders are happy with the loss of 81% over twelve months. That falls short of the market, which lost 3.0%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's great to see a nice little 1.1% 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). 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Amigo Holdings , and understanding them should be part of your investment process.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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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