The main aim of stock picking is to find the market-beating stocks. But every investor is virtually certain to have both over-performing and under-performing stocks. So we wouldn't blame long term Pengxin International Mining Co.,Ltd (SHSE:600490) shareholders for doubting their decision to hold, with the stock down 36% over a half decade. Shareholders have had an even rougher run lately, with the share price down 22% in the last 90 days.

Since Pengxin International MiningLtd has shed CN¥509m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Pengxin International MiningLtd

Given that Pengxin International MiningLtd 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last five years Pengxin International MiningLtd saw its revenue shrink by 10% per year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 6% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. Risk averse investors probably wouldn't like this one much.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

A Different Perspective

Pengxin International MiningLtd shareholders are down 7.1% over twelve months, which isn't far from the market return of -6.5%. However, the loss over the last year isn't as bad as the 6% per annum loss investors have suffered over the last half decade. It could well be that the business has begun to stabilize, although we'd be hesitant to buy without clear information suggesting the company will grow. 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. Take risks, for example - Pengxin International MiningLtd has 1 warning sign we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese 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.