Supermax Corporation Berhad (KLSE:SUPERMX investor five-year losses grow to 75% as the stock sheds RM229m this past week

Some stocks are best avoided. It hits us in the gut when we see fellow investors suffer a loss. Anyone who held Supermax Corporation Berhad (KLSE:SUPERMX) for five years would be nursing their metaphorical wounds since the share price dropped 80% in that time. And it's not just long term holders hurting, because the stock is down 24% in the last year. Shareholders have had an even rougher run lately, with the share price down 20% in the last 90 days. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

With the stock having lost 11% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

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Because Supermax Corporation Berhad 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last five years Supermax Corporation Berhad saw its revenue shrink by 37% per year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 13% per year in the same time period. We don't think this is a particularly promising picture. Of course, the poor performance could mean the market has been too severe selling down. That can happen.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. So we recommend checking out this free report showing consensus forecasts

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Supermax Corporation Berhad's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Supermax Corporation Berhad's TSR of was a loss of 75% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

We regret to report that Supermax Corporation Berhad shareholders are down 24% for the year. Unfortunately, that's worse than the broader market decline of 7.5%. 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, longer term shareholders are suffering worse, given the loss of 12% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

But note: Supermax Corporation Berhad may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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