Jiangsu Huifeng Bio Agriculture Co., Ltd. (SZSE:002496) shareholders will doubtless be very grateful to see the share price up 52% in the last month. But if you look at the last five years the returns have not been good. After all, the share price is down 28% in that time, significantly under-performing the market.
While the stock has risen 20% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
Because Jiangsu Huifeng Bio Agriculture 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. 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.
Over half a decade Jiangsu Huifeng Bio Agriculture reduced its trailing twelve month revenue by 36% for each year. That puts it in an unattractive cohort, to put it mildly. On the face of it we'd posit the share price fall of 5% compound, over five years is well justified by the fundamental deterioration. We doubt many shareholders are delighted with this share price performance. 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).
This free interactive report on Jiangsu Huifeng Bio Agriculture's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market lost about 9.5% in the twelve months, Jiangsu Huifeng Bio Agriculture shareholders did even worse, losing 21%. 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 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. To that end, you should be aware of the 1 warning sign we've spotted with Jiangsu Huifeng Bio Agriculture .
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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.