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.
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).
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.
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.
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