NYSE:HT) shareholders will doubtless be very grateful to see the share price up 35% in the last quarter. But don’t envy holders — looking back over 5 years the returns have been really bad. The share price has failed to impress anyone , down a sizable 75% during that time. So we’re hesitant to put much weight behind the short term increase. Of course, this could be the start of a turnaround.” data-reactid=”28″>Hersha Hospitality Trust (NYSE:HT) shareholders will doubtless be very grateful to see the share price up 35% in the last quarter. But don’t envy holders — looking back over 5 years the returns have been really bad. The share price has failed to impress anyone , down a sizable 75% during that time. So we’re hesitant to put much weight behind the short term increase. Of course, this could be the start of a turnaround.
View our latest analysis for Hersha Hospitality Trust ” data-reactid=”29″>View our latest analysis for Hersha Hospitality Trust
Given that Hersha Hospitality Trust 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 half decade, Hersha Hospitality Trust saw its revenue increase by 1.2% per year. That’s not a very high growth rate considering it doesn’t make profits. It’s not so sure that share price crash of 12% per year is completely deserved, but the market is doubtless disappointed. We’d be pretty cautious about this one, although the sell-off may be too severe. We’d recommend focussing any further research on the likelihood of profitability in the foreseeable future, given the muted revenue growth.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
report showing analyst profit forecasts.” data-reactid=”49″>It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling Hersha Hospitality Trust stock, you should check out this free report showing analyst profit forecasts.
What about the Total Shareholder Return (TSR)?
Investors should note that there’s a difference between Hersha Hospitality Trust’s total shareholder return (TSR) and its share price change, which we’ve covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Hersha Hospitality Trust’s TSR of was a loss of 64% for the 5 years. That wasn’t as bad as its share price return, because it has paid dividends.
A Different Perspective
Hersha Hospitality Trust is showing 2 warning signs in our investment analysis , and 1 of those can’t be ignored…” data-reactid=”53″>Hersha Hospitality Trust shareholders are down 52% for the year, but the market itself is up 18%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% over the last half decade. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Hersha Hospitality Trust is showing 2 warning signs in our investment analysis , and 1 of those can’t be ignored…
list of growing companies with recent insider purchasing, could be just the ticket.” data-reactid=”58″>Hersha Hospitality Trust 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.
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”60″>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.