The one-year earnings decline has likely contributed toGulf Union Alahlia Cooperative Insurance's (TADAWUL:8120) shareholders losses of 40% over that period

Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Gulf Union Alahlia Cooperative Insurance Company (TADAWUL:8120) share price is down 40% in the last year. That falls noticeably short of the market return of around 27%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 15% in three years. Furthermore, it's down 23% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

If the past week is anything to go by, investor sentiment for Gulf Union Alahlia Cooperative Insurance isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Gulf Union Alahlia Cooperative Insurance

Given that Gulf Union Alahlia Cooperative Insurance didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last twelve months, Gulf Union Alahlia Cooperative Insurance increased its revenue by 24%. We think that is pretty nice growth. Unfortunately that wasn't good enough to stop the share price dropping 40%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Gulf Union Alahlia Cooperative Insurance shareholders are down 40% for the year, but the market itself is up 27%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 4 warning signs for Gulf Union Alahlia Cooperative Insurance (2 make us uncomfortable) that you should be aware of.

We will like Gulf Union Alahlia Cooperative Insurance 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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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.