The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in Studio City International Holdings Limited (NYSE:MSC) have tasted that bitter downside in the last year, as the share price dropped 33%. That falls noticeably short of the market return of around 75%. We wouldn't rush to judgement on Studio City International Holdings because we don't have a long term history to look at. More recently, the share price has dropped a further 9.7% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
Given that Studio City International Holdings 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In just one year Studio City International Holdings saw its revenue fall by 92%. That looks like a train-wreck result to investors far and wide. No surprise, then, that the share price fell 33% over the year. It's always work digging deeper, but we'd probably need to see a strong balance sheet and bottom line improvements to get interested in this one.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Studio City International Holdings stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Given that the market gained 75% in the last year, Studio City International Holdings shareholders might be miffed that they lost 33%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 5.1%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. Take risks, for example - Studio City International Holdings has 2 warning signs we think you should be aware of.
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 US 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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