Sharjah Cement and Industrial Development (PJSC) (ADX:SCIDC investor five-year losses grow to 39% as the stock sheds د.إ41m this past week

Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win with some selections. At this point some shareholders may be questioning their investment in Sharjah Cement and Industrial Development Co. (PJSC) (ADX:SCIDC), since the last five years saw the share price fall 47%. On top of that, the share price is down 11% in the last week.

Given the past week has been tough on shareholders, let’s investigate the fundamentals and see what we can learn.

See our latest analysis for Sharjah Cement and Industrial Development (PJSC)

Sharjah Cement and Industrial Development (PJSC) 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. When a company doesn’t make profits, we’d generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last five years Sharjah Cement and Industrial Development (PJSC) saw its revenue shrink by 6.0% per year. That’s not what investors generally want to see. The share price decline at a rate of 8% per year is disappointing. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. It might be worth watching for signs of a turnaround – buyers are probably expecting one.

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 Sharjah Cement and Industrial Development (PJSC)’s balance sheet strength is a great place to start, if you want to investigate the stock further.

What About The Total Shareholder Return (TSR)?

We’ve already covered Sharjah Cement and Industrial Development (PJSC)’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. Its history of dividend payouts mean that Sharjah Cement and Industrial Development (PJSC)’s TSR, which was a 39% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

Investors in Sharjah Cement and Industrial Development (PJSC) had a tough year, with a total loss of 19%, against a market gain of about 41%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we’ve spotted 3 warning signs for Sharjah Cement and Industrial Development (PJSC) (of which 1 is significant!) you should know about.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.