A Look At Warpaint London's (LON:W7L) Share Price Returns

Warpaint London PLC (LON:W7L) shareholders will doubtless be very grateful to see the share price up 33% in the last quarter. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 59% in the last three years. So it is really good to see an improvement. After all, could be that the fall was overdone.

View our latest analysis for Warpaint London

Given that Warpaint London 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.

Over three years, Warpaint London grew revenue at 18% per year. That's a pretty good rate of top-line growth. That contrasts with the weak share price, which has fallen 17% compounded, over three years. The market must have had really high expectations to be disappointed with this progress. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

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

This free interactive report on Warpaint London's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Warpaint London's TSR for the last 3 years was -54%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

We're pleased to report that Warpaint London rewarded shareholders with a total shareholder return of 3.7% over the last year. And yes, that does include the dividend. This recent result is much better than the 15% drop suffered by shareholders each year (on average) over the last three. It could well be that the business has turned around -- or else regained the confidence of investors. 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. Even so, be aware that Warpaint London is showing 6 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

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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