Would Shareholders Who Purchased Banyan Tree Holdings' (SGX:B58) Stock Three Years Be Happy With The Share price Today?

By
Simply Wall St
Published
June 02, 2021
SGX:B58
Source: Shutterstock

As an investor its worth striving to ensure your overall portfolio beats the market average. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term Banyan Tree Holdings Limited (SGX:B58) shareholders have had that experience, with the share price dropping 47% in three years, versus a market decline of about 1.2%. Unfortunately the share price momentum is still quite negative, with prices down 9.4% in thirty days.

See our latest analysis for Banyan Tree Holdings

Banyan Tree Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last three years Banyan Tree Holdings saw its revenue shrink by 10% per year. That's not what investors generally want to see. The stock has disappointed holders over the last three years, falling 14%, annualized. That makes sense given the lack of either profits or revenue growth. However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

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

earnings-and-revenue-growth
SGX:B58 Earnings and Revenue Growth June 3rd 2021

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

Banyan Tree Holdings provided a TSR of 18% over the year. That's fairly close to the broader market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 7%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Banyan Tree Holdings. 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. Even so, be aware that Banyan Tree Holdings is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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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