It might be of some concern to shareholders to see the Teekay Tankers Ltd. (NYSE:TNK) share price down 11% in the last month. But over the last three years returns have been decent. In that time the stock gained 49%, besting the market return of 44%.
With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
Because Teekay Tankers made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong 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 3 years Teekay Tankers saw its revenue shrink by 13% per year. Despite the lack of revenue growth, the stock has returned 14%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.
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 Teekay Tankers’ balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It’s nice to see that Teekay Tankers shareholders have received a total shareholder return of 7.6% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 0.7% per year), it would seem that the stock’s performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 Teekay Tankers , and understanding them should be part of your investment process.
We will like Teekay Tankers 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.
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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.