Even though Saudi Printing and Packaging (TADAWUL:4270) has lost ر.س152m market cap in last 7 days, shareholders are still up 28% over 3 years

By
Simply Wall St
Published
November 28, 2021
SASE:4270
Source: Shutterstock

It hasn't been the best quarter for Saudi Printing and Packaging Co. (TADAWUL:4270) shareholders, since the share price has fallen 22% in that time. On the other hand the share price is higher than it was three years ago. Arguably you'd have been better off buying an index fund, because the gain of 28% in three years isn't amazing.

In light of the stock dropping 10% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

See our latest analysis for Saudi Printing and Packaging

Because Saudi Printing and Packaging 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Saudi Printing and Packaging actually saw its revenue drop by 12% per year over three years. The modest share price gain of 9% per year suggests holders are sanguine about the falling revenue. Profit focussed investors would generally avoid a company with falling revenue and zero profits, since it's hard to imagine when profit might come.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
SASE:4270 Earnings and Revenue Growth November 29th 2021

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

A Different Perspective

Investors in Saudi Printing and Packaging had a tough year, with a total loss of 22%, against a market gain of about 10%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 3% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Saudi Printing and Packaging better, we need to consider many other factors. For instance, we've identified 1 warning sign for Saudi Printing and Packaging that you should be aware of.

We will like Saudi Printing and Packaging better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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