As an investor, mistakes are inevitable. But really big losses can really drag down an overall portfolio. So consider, for a moment, the misfortune of Alphinat Inc. (CVE:NPA) investors who have held the stock for three years as it declined a whopping 74%. That'd be enough to cause even the strongest minds some disquiet. And over the last year the share price fell 22%, so we doubt many shareholders are delighted. Unhappily, the share price slid 13% in the last week.
Check out our latest analysis for Alphinat
Given that Alphinat 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. It would be hard to believe in a more profitable future without growing revenues.
In the last three years Alphinat saw its revenue shrink by 14% per year. That's not what investors generally want to see. The share price fall of 36% (per year, over three years) is a stern reminder that money-losing companies are expected to grow revenue. This business clearly needs to grow revenues if it is to perform as investors hope. There's no more than a snowball's chance in hell that share price will head back to its old highs, in the short term.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Alphinat's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We regret to report that Alphinat shareholders are down 22% for the year. Unfortunately, that's worse than the broader market decline of 16%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6.9% 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 Alphinat better, we need to consider many other factors. Take risks, for example - Alphinat has 4 warning signs (and 2 which shouldn't be ignored) we think you should know about.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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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April 15, 2020 at 01:57AM
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Easy Come, Easy Go: How Alphinat (CVE:NPA) Shareholders Got Unlucky And Saw 74% Of Their Cash Evaporate - Yahoo Finance
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