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Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term AMD Industries Limited (NSE:AMDIND) shareholders, since the share price is down 49% in the last three years, falling well short of the market return of around 17%. And more recent buyers are having a tough time too, with a drop of 42% in the last year. Shareholders have had an even rougher run lately, with the share price down 28% in the last 90 days.
Check out our latest analysis for AMD Industries
While AMD Industries made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. 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.
In the last three years AMD Industries saw its revenue shrink by 2.6% per year. That's not what investors generally want to see. The stock has disappointed holders over the last three years, falling 20%, annualized. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.
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 AMD Industries'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 AMD Industries's share price action, but we should also mention its total shareholder return (TSR). 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. AMD Industries's TSR of was a loss of 48% for the 3 years. That wasn't as bad as its share price return, because it has paid dividends.
A Different Perspective
While the broader market lost about 11% in the twelve months, AMD Industries shareholders did even worse, losing 42%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 8.3% 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. You could get a better understanding of AMD Industries's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.