For many investors, the main point of stock picking is to generate higher returns than the overall market. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. We regret to report that long term Jiangxi Fushine Pharmaceutical Co., Ltd. (SZSE:300497) shareholders have had that experience, with the share price dropping 33% in three years, versus a market decline of about 15%. And over the last year the share price fell 24%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 13% in the last three months. Of course, this share price action may well have been influenced by the 6.3% decline in the broader market, throughout the period.
After losing 6.5% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
See our latest analysis for Jiangxi Fushine Pharmaceutical
Jiangxi Fushine Pharmaceutical wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years, Jiangxi Fushine Pharmaceutical saw its revenue grow by 5.1% per year, compound. That's not a very high growth rate considering it doesn't make profits. Indeed, the stock dropped 10% over the last three years. Shareholders will probably be hoping growth picks up soon. But the real upside for shareholders will be if the company can start generating profits.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Jiangxi Fushine Pharmaceutical stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We regret to report that Jiangxi Fushine Pharmaceutical shareholders are down 24% for the year. Unfortunately, that's worse than the broader market decline of 9.9%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Jiangxi Fushine Pharmaceutical better, we need to consider many other factors. For instance, we've identified 1 warning sign for Jiangxi Fushine Pharmaceutical that you should be aware of.
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 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.