If You Had Bought New Era Electronics (GTSM:4909) Shares A Year Ago You'd Have Earned 10% Returns

There's no doubt that investing in the stock market is a truly brilliant way to build wealth. But if when you choose to buy stocks, some of them will be below average performers. Unfortunately for shareholders, while the New Era Electronics Co., Ltd (GTSM:4909) share price is up 10% in the last year, that falls short of the market return. However, the stock hasn't done so well in the longer term, with the stock only up 3.4% in three years.

Check out our latest analysis for New Era Electronics

Given that New Era Electronics only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

New Era Electronics actually shrunk its revenue over the last year, with a reduction of 26%. Given the revenue reduction the modest 10% share price rise over the year seems pretty decent. Generally we're pretty unenthusiastic about loss making stocks that are not growing revenue.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at New Era Electronics' financial health with this free report on its balance sheet.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between New Era Electronics' total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for New Era Electronics shareholders, and that cash payout contributed to why its TSR of 12%, over the last year, is better than the share price return.

A Different Perspective

New Era Electronics shareholders gained a total return of 12% during the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 3% over half a decade This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand New Era Electronics better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for New Era Electronics (of which 1 doesn't sit too well with us!) you should know about.

Of course New Era Electronics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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