Statistically speaking, long term investing is a profitable endeavour. But along the way some stocks are going to perform badly. For example the Brøndbyernes IF Fodbold A/S (CPH:BIF) share price dropped 72% over five years. That's an unpleasant experience for long term holders. We also note that the stock has performed poorly over the last year, with the share price down 35%. Even worse, it's down 23% in about a month, which isn't fun at all.
View our latest analysis for Brøndbyernes IF Fodbold
Brøndbyernes IF Fodbold 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over five years, Brøndbyernes IF Fodbold grew its revenue at 9.1% per year. That's a fairly respectable growth rate. So it is unexpected to see the stock down 23% per year in the last five years. The market can be a harsh master when your company is losing money and revenue growth disappoints.
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 Brøndbyernes IF Fodbold stock, you should check out this FREE detailed report on its balance sheet.
What about the Total Shareholder Return (TSR)?
We've already covered Brøndbyernes IF Fodbold's share price action, but we should also mention its total shareholder return (TSR). 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. Brøndbyernes IF Fodbold hasn't been paying dividends, but its TSR of -63% exceeds its share price return of -72%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
Brøndbyernes IF Fodbold shareholders are down 28% for the year, but the market itself is up 32%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 18% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Brøndbyernes IF Fodbold better, we need to consider many other factors. Be aware that Brøndbyernes IF Fodbold is showing 4 warning signs in our investment analysis , and 1 of those is concerning...
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on DK exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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February 21, 2020 at 12:00PM
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Easy Come, Easy Go: How Brøndbyernes IF Fodbold (CPH:BIF) Shareholders Got Unlucky And Saw 72% Of Their Cash Evaporate - Yahoo Finance
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