Stock Analysis

International Hotel Investments'(MTSE:IHI) Share Price Is Down 23% Over The Past Year.

MTSE:IHI
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It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the International Hotel Investments p.l.c. (MTSE:IHI) share price slid 23% over twelve months. That contrasts poorly with the market decline of 15%. Longer term investors have fared much better, since the share price is up 2.5% in three years. Unfortunately the share price momentum is still quite negative, with prices down 14% in thirty days.

See our latest analysis for International Hotel Investments

Given that International Hotel Investments didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In just one year International Hotel Investments saw its revenue fall by 25%. That's not what investors generally want to see. Shareholders have seen the share price drop 23% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

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

earnings-and-revenue-growth
MTSE:IHI Earnings and Revenue Growth February 22nd 2021

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of International Hotel Investments' earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 15% in the twelve months, International Hotel Investments shareholders did even worse, losing 23%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.2% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

International Hotel Investments is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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