Statistically speaking, long term investing is a profitable endeavour. But that doesn't mean long term investors can avoid big losses. For example the accesso Technology Group plc (LON:ACSO) share price dropped 65% over five years. That's an unpleasant experience for long term holders. Shareholders have had an even rougher run lately, with the share price down 30% in the last 90 days.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During five years of share price growth, accesso Technology Group moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics may better explain the share price move.
Arguably, the revenue drop of 7.0% a year for half a decade suggests that the company can't grow in the long term. This has probably encouraged some shareholders to sell down the stock.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We know that accesso Technology Group has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at accesso Technology Group's financial health with this free report on its balance sheet.
A Different Perspective
While it's certainly disappointing to see that accesso Technology Group shares lost 2.0% throughout the year, that wasn't as bad as the market loss of 7.5%. Of far more concern is the 11% p.a. loss served to shareholders over the last five years. While the losses are slowing we doubt many shareholders are happy with the stock. It's always interesting to track share price performance over the longer term. But to understand accesso Technology Group better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for accesso Technology Group you should be aware of, and 1 of them shouldn't be ignored.
We will like accesso Technology Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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.