In This Article:
While LSB Industries, Inc. (NYSE:LXU) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 29% in the last quarter. But that does not change the realty that the stock's performance has been terrific, over five years. To be precise, the stock price is 330% higher than it was five years ago, a wonderful performance by any measure. So we don't think the recent decline in the share price means its story is a sad one. But the real question is whether the business fundamentals can improve over the long term. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 79% decline over the last three years: that's a long time to wait for profits.
While the stock has fallen 17% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.
Because LSB Industries made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last 5 years LSB Industries saw its revenue grow at 12% per year. That's a pretty good long term growth rate. Arguably it's more than reflected in the very strong share price gain of 34% a year over a half a decade. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
If you are thinking of buying or selling LSB Industries stock, you should check out this FREE detailed report on its balance sheet .
A Different Perspective
We regret to report that LSB Industries shareholders are down 35% for the year. Unfortunately, that's worse than the broader market decline of 1.9%. 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. On the bright side, long term shareholders have made money, with a gain of 34% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. If you would like to research LSB Industries in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.