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Posted By TheNewsCommenter: From News.yahoo.com: “If You Had Bought Barak Valley Cements (NSE:BVCL) Stock Three Years Ago, You'd Be Sitting On A 57% Loss, Today”. Below is an excerpt from the article.
If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Barak Valley Cements Limited (NSE:BVCL) shareholders have had a particularly rough ride in the last three year. So they might be feeling emotional about the 57% share price collapse, in that time. And over the last year the share price fell 30%, so we doubt many shareholders are delighted. Shareholders have had an even rougher run lately, with the share price down 22% in the last 90 days.
We don't think that Barak Valley Cements's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
Over three years, Barak Valley Cements grew revenue at 6.3% per year. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 24% for the last three years. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term). After all, growing a business isn't easy, and the process will not always be smooth.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
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