If You Had Bought Greenlight Capital Re's (NASDAQ:GLRE) Shares Five Years Ago You Would Be Down 73%
Long term investing works well, but it doesn't always work for each individual stock. We really hate to see fellow investors lose their hard-earned money. For example, we sympathize with anyone who was caught holding Greenlight Capital Re, Ltd. (NASDAQ:GLRE) during the five years that saw its share price drop a whopping 73%. And it's not just long term holders hurting, because the stock is down 39% in the last year. Unfortunately the share price momentum is still quite negative, with prices down 13% in thirty days. We do note, however, that the broader market is down 5.7% in that period, and this may have weighed on the share price.
View our latest analysis for Greenlight Capital Re
Greenlight Capital Re isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. 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 half decade, Greenlight Capital Re saw its revenue increase by 5.7% per year. That's far from impressive given all the money it is losing. It's not so sure that share price crash of 12% per year is completely deserved, but the market is doubtless disappointed. We'd be pretty cautious about this one, although the sell-off may be too severe. A company like this generally needs to produce profits before it can find favour with new investors.
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 Greenlight Capital Re stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Investors in Greenlight Capital Re had a tough year, with a total loss of 39%, against a market gain of about 16%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 12% over the last half decade. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Greenlight Capital Re , and understanding them should be part of your investment process.
We will like Greenlight Capital Re 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 US 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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