Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who held Unibios Holdings S.A. (ATH:BIOSK) for five whole years – as the share price tanked 84%. And we doubt long term believers are the only worried holders, since the stock price has declined 54% over the last twelve months. It’s down 1.6% in the last seven days.
While a drop like that is definitely a body blow, money isn’t as important as health and happiness.
While Unibios Holdings made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, companies that are not judged on their (small) profits should be growing revenue quickly. The main reason for this is that fast revenue growth can be readily extrapolated into a profitable future, but stagnant revenue cannot.
Over half a decade Unibios Holdings reduced its trailing twelve month revenue by 11% for each year. That’s definitely a weaker result than most pre-profit companies report. So it’s not that strange that the share price dropped 31% per year in that period. We don’t think this is a particularly promising picture. Ironically, that behavior could create an opportunity for the contrarian investor – but only if there are good reasons to predict a brighter future.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
If you are thinking of buying or selling Unibios Holdings stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market lost about 16% in the twelve months, Unibios Holdings shareholders did even worse, losing 54%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there’s a good opportunity. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 31% over the last half decade. 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. Before spending more time on Unibios Holdings it might be wise to click here to see if insiders have been buying or selling shares.
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 GR 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 firstname.lastname@example.org. 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.