How Much Did Climeon's(STO:CLIME B) Shareholders Earn From Share Price Movements Over The Last Year?

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Climeon AB (publ) (STO:CLIME B) share price slid 23% over twelve months. That contrasts poorly with the market return of 18%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 9.0% in three years. Furthermore, it's down 20% in about a quarter. That's not much fun for holders.

View our latest analysis for Climeon

Given that Climeon 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In just one year Climeon saw its revenue fall by 16%. That's not what investors generally want to see. Shareholders have seen the share price drop 23% in that time. What would you expect when revenue is falling, and it doesn't make a profit? It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. If you are thinking of buying or selling Climeon stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

Climeon shareholders are down 23% for the year, but the broader market is up 18%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 2.9% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Climeon (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

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This article by Simply Wall St is general in nature. 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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