Even the best investor on earth makes unsuccessful investments. But it would be foolish to simply accept every extremely large loss as an inevitable part of the game. It must have been painful to be a DTXS Silk Road Investment Holdings Company Limited (HKG:620) shareholder over the last year, since the stock price plummeted 85% in that time. That'd be enough to make even the strongest stomachs churn. Even if you look out three years, the returns are still disappointing, with the share price down78% in that time. The falls have accelerated recently, with the share price down 59% in the last three months. 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.

Since DTXS Silk Road Investment Holdings has shed HK$534m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for DTXS Silk Road Investment Holdings

Because DTXS Silk Road Investment Holdings 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. 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 just one year DTXS Silk Road Investment Holdings saw its revenue fall by 43%. That looks pretty grim, at a glance. The share price fall of 85% in a year tells the story. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at DTXS Silk Road Investment Holdings' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 22% in the twelve months, DTXS Silk Road Investment Holdings shareholders did even worse, losing 85%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 13% per year over five years. 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. To that end, you should learn about the 3 warning signs we've spotted with DTXS Silk Road Investment Holdings (including 1 which is a bit concerning) .

But note: DTXS Silk Road Investment Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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