Middle East Specialized Cables (TADAWUL:2370) pulls back 11% this week, but still delivers shareholders favorable 7.7% CAGR over 5 years

Middle East Specialized Cables Company (TADAWUL:2370) shareholders might be concerned after seeing the share price drop 23% in the last quarter. On the bright side the share price is up over the last half decade. In that time, it is up 45%, which isn't bad, but is below the market return of 85%. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 40% drop, in the last year.

While this past week has detracted from the company's five-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

See our latest analysis for Middle East Specialized Cables

Middle East Specialized Cables isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last 5 years Middle East Specialized Cables saw its revenue shrink by 6.7% per year. The stock is only up 8% for each year during the period. Arguably that's not bad given the soft revenue and loss-making position. Of course, a closer look at the bottom line - and any available analyst forecasts - could reveal an opportunity (if they point to future growth).

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

If you are thinking of buying or selling Middle East Specialized Cables stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 21% in the last year, Middle East Specialized Cables shareholders lost 40%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 8%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Middle East Specialized Cables better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Middle East Specialized Cables (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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