Easy Come, Easy Go: How Victoria Oil & Gas (LON:VOG) Shareholders Got Unlucky And Saw 84% Of Their Cash Evaporate

We're definitely into long term investing, but some companies are simply bad investments over any time frame. We really hate to see fellow investors lose their hard-earned money. For example, we sympathize with anyone who was caught holding Victoria Oil & Gas Plc (LON:VOG) during the five years that saw its share price drop a whopping 84%. And it's not just long term holders hurting, because the stock is down 71% in the last year. Even worse, it's down 24% in about a month, which isn't fun at all.

While a drop like that is definitely a body blow, money isn't as important as health and happiness.

Check out our latest analysis for Victoria Oil & Gas

Victoria Oil & Gas isn't a profitable company, so 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. 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.

In the last five years Victoria Oil & Gas saw its revenue shrink by 4.4% per year. That's not what investors generally want to see. If a business loses money, you want it to grow, so no surprises that the share price has dropped 30% each year in that time. It takes a certain kind of mental fortitude (or recklessness) to buy shares in a company that loses money and doesn't grow revenue. Fear of becoming a 'bagholder' may be keeping people away from this stock.

Take a more thorough look at Victoria Oil & Gas's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Victoria Oil & Gas shareholders are down 71% for the year. Unfortunately, that's worse than the broader market decline of 1.9%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 30% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.