Yahoo Finance SKY Network Television's(NZSE:SKT) Share Price Is Down 97% Over The Past Five Years.
Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. For example, we sympathize with anyone who was caught holding SKY Network Television Limited (NZSE:SKT) during the five years that saw its share price drop a whopping 97%. And we doubt long term believers are the only worried holders, since the stock price has declined 87% over the last twelve months. There was little comfort for shareholders in the last week as the price declined a further 1.4%.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
View our latest analysis for SKY Network Television
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
SKY Network Television has made a profit in the past. On the other hand, it reported a trailing twelve months loss, suggesting it isn't reliably profitable. Other metrics may better explain the share price move.
It could be that the revenue decline of 4.7% per year is viewed as evidence that SKY Network Television is shrinking. That could explain the weak share price.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think SKY Network Television will earn in the future (free profit forecasts).
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between SKY Network Television's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for SKY Network Television shareholders, and that cash payout explains why its total shareholder loss of 86%, over the last 5 years, isn't as bad as the share price return.
A Different Perspective
SKY Network Television shareholders are down 56% for the year, but the market itself is up 7.2%. 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 13% 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 SKY Network Television better, we need to consider many other factors. For instance, we've identified 1 warning sign for SKY Network Television that you should be aware of.
SKY Network Television is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NZ exchanges.
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. 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.
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