The one-year decline in earnings might be taking its toll on LAND (TSE:8918) shareholders as stock falls 11% over the past week
It hasn't been the best quarter for LAND Co., Ltd. (TSE:8918) shareholders, since the share price has fallen 20% in that time. Looking on the brighter side, the stock is actually up over twelve months. However, its return of 14% does fall short of the market return of, 25%.
While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.
While LAND 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. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last year LAND saw its revenue shrink by 53%. Given the revenue reduction the modest 14% share price rise over the year seems pretty decent. We'd want to see progress to profitability before getting too interested in this stock.
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 LAND stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
LAND shareholders are up 16% for the year (even including dividends). Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 1.3% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for LAND (of which 1 is concerning!) you should know about.
We will like LAND better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 Japanese exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.