Those Who Purchased Merchant House International (ASX:MHI) Shares Five Years Ago Have A 37% Loss To Show For It
It is a pleasure to report that the Merchant House International Limited (ASX:MHI) is up 97% in the last quarter. But over the last half decade, the stock has not performed well. In fact, the share price is down 37%, which falls well short of the return you could get by buying an index fund.
Check out our latest analysis for Merchant House International
Merchant House International isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 five years Merchant House International saw its revenue shrink by 8.4% per year. While far from catastrophic that is not good. The share price decline at a rate of 8.8% per year is disappointing. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. It might be worth watching for signs of a turnaround - buyers are probably expecting one.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Merchant House International's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that Merchant House International has rewarded shareholders with a total shareholder return of 20% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 8.3% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Merchant House International better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Merchant House International you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
