Widam Food Company Q.P.S.C (DSM:WDAM shareholders incur further losses as stock declines 11% this week, taking five-year losses to 68%

Statistically speaking, long term investing is a profitable endeavour. But that doesn't mean long term investors can avoid big losses. To wit, the Widam Food Company Q.P.S.C. (DSM:WDAM) share price managed to fall 72% over five long years. That's an unpleasant experience for long term holders. Even worse, it's down 16% in about a month, which isn't fun at all.

Since Widam Food Company Q.P.S.C has shed ر.ق46m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Widam Food Company Q.P.S.C

Because Widam Food Company Q.P.S.C 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 expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last five years Widam Food Company Q.P.S.C saw its revenue shrink by 3.4% per year. While far from catastrophic that is not good. The share price fall of 11% (per year, over five years) is a stern reminder that money-losing companies are expected to grow revenue. It takes a certain kind of mental fortitude (or recklessness) to buy shares in a company that loses money and doesn't grow revenue. That is not really what the successful investors we know aim for.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Widam Food Company Q.P.S.C'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. Dividends have been really beneficial for Widam Food Company Q.P.S.C shareholders, and that cash payout explains why its total shareholder loss of 68%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

We're pleased to report that Widam Food Company Q.P.S.C shareholders have received a total shareholder return of 30% over one year. Notably the five-year annualised TSR loss of 11% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Widam Food Company Q.P.S.C (of which 2 are a bit concerning!) you should know about.

Of course Widam Food Company Q.P.S.C may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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