Low-cost index funds make it easy to achieve average market returns. But in any diversified portfolio of stocks, you'll see some that fall short of the average. For example, the Associated Capital Group, Inc. (NYSE:AC) share price return of 15% over three years lags the market return in the same period. Looking at more recent returns, the stock is up 5.9% in a year.
Given that Associated Capital Group 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Associated Capital Group actually saw its revenue drop by 10% per year over three years. The modest share price gain of 4.7% per year suggests holders are sanguine about the falling revenue. As a general rule we don't like it when a loss-making company isn't even 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).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Associated Capital Group produced a TSR of 6.5% over the last year. It's always nice to make money but this return falls short of the market return which was about 30% for the year. On the bright side that gain is actually better than the average return of 5.3% over the last three years, implying that the company is doing better recently. If the business can justify the share price gain with improving fundamental data, then there could be more gains to come. Before spending more time on Associated Capital Group it might be wise to click here to see if insiders have been buying or selling shares.
But note: Associated Capital Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
When trading Associated Capital Group or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account.