Loss-making Allied Cooperative Insurance Group (TADAWUL:8150) loses another £265m, taking total shareholder losses to 43% YoY

The easiest way to take advantage of a bull market is to buy an index fund. While individual stocks can be big winners, many others fail to generate satisfactory returns. Investors in Allied Cooperative Insurance Group (TADAWUL:8150) tasted this bitter decline last year, with the stock price dropping 64%. This contrasts poorly with the market return of 27%. Notably, shareholders have also struggled longer term, with a 43% drop over the past three years. The falls have accelerated recently, with the stock price dropping 20% ​​in the past three months. We note that the company released results quite recently; and the market is hardly thrilled. You can view the latest figures in our corporate report.

Given that the past week has been tough for shareholders, let’s take a look at the fundamentals and see what we can learn.

Check out our latest analysis for Allied Cooperative Insurance Group

Given that Allied Cooperative Insurance Group has posted losses over the past twelve months, we think the market is likely more focused on revenue and revenue growth, at least for now. Shareholders of unprofitable companies generally expect strong revenue growth. Some companies are willing to defer profitability to increase revenue faster, but in this case, good revenue growth is expected.

Over the last twelve months, Allied Cooperative Insurance Group has increased its turnover by 3.0%. While that might sound decent, it’s not great considering the company continues to make losses. Without profits, and with slow revenue growth, you end up with a 64% shareholder loss for the year. We would like to see evidence that future revenue growth will be stronger before we get too interested. Of course, sometimes the market can be too impatient. Why not take a closer look at this one so you’re ready to pounce if growth picks up.

The image below shows how earnings and income have tracked over time (if you click on the image you can see more details).

SASE: 8150 Earnings and Revenue Growth April 13, 2022

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive chart.

What about the Total Shareholder Return (TSR)?

Investors should note that there is a difference between Allied Cooperative Insurance Group’s total shareholder return (TSR) and the change in its share price, which we discussed above. Arguably, TSR is a more comprehensive return calculation as it takes into account the value of dividends (as if reinvested), as well as the hypothetical value of any discounted capital that has been offered to shareholders. Allied Cooperative Insurance Group did not pay dividends, but its TSR of -43% exceeds its share price return of -64%, implying that it either started a business or raised capital with a next to ; thereby providing added value to shareholders.

A different perspective

Investors in Allied Cooperative Insurance Group had a difficult year, with a total loss of 43%, against a market gain of around 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the positive side, long-term shareholders have made money, gaining 5% per year over half a decade. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. However, be aware that Allied Cooperative Insurance Group shows 3 warning signs in our investment analysis and 1 of them is a little unpleasant…

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of companies that have proven that they can increase their profits.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on SA exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.