Creative Peripherals and Distribution Limited (NSE:CREATIVE) shareholders should be happy to see the share price up 26% in the last quarter. But that doesn’t change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 27% in the last year, significantly under-performing the market.
We don’t think that Creative Peripherals and Distribution’s modest trailing twelve month profit has the market’s full attention at the moment. We think revenue is probably a better guide. Generally speaking, companies that are not judged on their (small) profits should be growing revenue quickly. As you can imagine, it’s easy to imagine a fast growing company becoming (potentially very) profitable, but when revenue growth slows, then the potential upside often seems less impressive.
In the last year Creative Peripherals and Distribution saw its revenue grow by 18%. We think that is pretty nice growth. Meanwhile, the share price is down 27% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
This free interactive report on Creative Peripherals and Distribution’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We doubt Creative Peripherals and Distribution shareholders are happy with the loss of 27% over twelve months (even including dividends). That falls short of the market, which lost 6.5%. 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 26% 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). Is Creative Peripherals and Distribution cheap compared to other companies? These 3 valuation measures might help you decide.
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 IN exchanges.
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