Despite shrinking by ₪93m in the past week, Shemen Yielding Real Estate (TLV:SMNR) shareholders are still up 217% over 5 years

Shemen Yielding Real Estate Ltd (TLV:SMNR) shareholders might be concerned after seeing the share price drop 13% in the last week. But that doesn't change the fact that shareholders have received really good returns over the last five years. Indeed, the share price is up an impressive 217% in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. Ultimately business performance will determine whether the stock price continues the positive long term trend.

Although Shemen Yielding Real Estate has shed ₪93m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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Because Shemen Yielding Real Estate 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last half decade Shemen Yielding Real Estate's revenue has actually been trending down at about 81% per year. On the other hand, the share price done the opposite, gaining 26%, compound, each year. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Shemen Yielding Real Estate's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Shemen Yielding Real Estate shareholders are up 1.8% for the year. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 26% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. 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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Shemen Yielding Real Estate you should know about.

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 Israeli exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.