Easy Come, Easy Go: How SG Blocks (NASDAQ:SGBX) Shareholders Torched 96% Of Their Cash

It's not a secret that every investor will make bad investments, from time to time. But it should be a priority to avoid stomach churning catastrophes, wherever possible. We wouldn't blame SG Blocks, Inc. (NASDAQ:SGBX) shareholders if they were still in shock after the stock dropped like a lead balloon, down 96% in just one year. A loss like this is a stark reminder that portfolio diversification is important. We wouldn't rush to judgement on SG Blocks because we don't have a long term history to look at. Unfortunately the share price momentum is still quite negative, with prices down 45% in thirty days. We do note, however, that the broader market is down 26% in that period, and this may have weighed on the share price.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

Check out our latest analysis for SG Blocks

Because SG Blocks 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. When a company doesn't make profits, we'd generally expect to see good 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 just one year SG Blocks saw its revenue fall by 39%. That looks pretty grim, at a glance. The market obviously agrees, since the share price tanked 96%. That's a stern reminder that profitless companies need to grow the top line, at the very least. But markets do over-react, so there opportunity for investors who are willing to take the time to dig deeper and understand the business.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling SG Blocks stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We doubt SG Blocks shareholders are happy with the loss of 96% over twelve months. That falls short of the market, which lost 11%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 40%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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 6 warning signs for SG Blocks (of which 2 shouldn't be ignored!) you should know about.

We will like SG Blocks 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.