We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. Zooming in on an example, the Hui Xian Real Estate Investment Trust (HKG:87001) share price dropped 71% in the last half decade. That is extremely sub-optimal, to say the least. But it's up 8.3% in the last week.

On a more encouraging note the company has added CN¥445m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for Hui Xian Real Estate Investment Trust

Because Hui Xian Real Estate Investment Trust 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last five years Hui Xian Real Estate Investment Trust saw its revenue shrink by 9.2% per year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 11% per year in the same time period. This kind of price performance makes us very wary, especially when combined with falling revenue. Of course, the poor performance could mean the market has been too severe selling down. That can happen.

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 Hui Xian Real Estate Investment Trust's financial health with this free report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Hui Xian Real Estate Investment Trust's TSR for the last 5 years was -60%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

The total return of 7.7% received by Hui Xian Real Estate Investment Trust shareholders over the last year isn't far from the market return of -7.4%. However, the loss over the last year isn't as bad as the 10% per annum loss investors have suffered over the last half decade. Generally speaking we'd prefer see an improvement in the fundamental metrics before becoming enthusiastic about the stock. 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 2 warning signs we've spotted with Hui Xian Real Estate Investment Trust (including 1 which is significant) .

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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