Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. For example, the Ten Lifestyle Group Plc (LON:TENG) share price is down 43% in the last year. That's well below the market decline of 15%. We wouldn't rush to judgement on Ten Lifestyle Group because we don't have a long term history to look at.
Check out our latest analysis for Ten Lifestyle Group
Given that Ten Lifestyle Group didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Ten Lifestyle Group saw its revenue grow by 17%. That's definitely a respectable growth rate. Unfortunately that wasn't good enough to stop the share price dropping 43%. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling Ten Lifestyle Group stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
We doubt Ten Lifestyle Group shareholders are happy with the loss of 43% over twelve months. That falls short of the market, which lost 15%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 8.7% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Ten Lifestyle Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for Ten Lifestyle Group (1 is significant!) that you should be aware of before investing here.
Ten Lifestyle Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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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