Banyan Tree Holdings' (SGX:B58) Stock Price Has Reduced 54% In The Past Three Years

If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the long term shareholders of Banyan Tree Holdings Limited (SGX:B58) have had an unfortunate run in the last three years. Sadly for them, the share price is down 54% in that time. And over the last year the share price fell 31%, so we doubt many shareholders are delighted. It's down 3.7% in the last seven days.

See our latest analysis for Banyan Tree Holdings

Banyan Tree Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

In the last three years Banyan Tree Holdings saw its revenue shrink by 1.4% per year. That's not what investors generally want to see. The share price decline of 15% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Having said that, if growth is coming in the future, now may be the low ebb for the company. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.

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

Take a more thorough look at Banyan Tree Holdings' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 5.5% in the twelve months, Banyan Tree Holdings shareholders did even worse, losing 31%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Banyan Tree Holdings better, we need to consider many other factors. Even so, be aware that Banyan Tree Holdings is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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