Some stocks are best avoided. We don't wish catastrophic capital loss on anyone. Anyone who held Great Wall Belt & Road Holdings Limited (HKG:524) for five years would be nursing their metaphorical wounds since the share price dropped 90% in that time. And we doubt long term believers are the only worried holders, since the stock price has declined 69% over the last twelve months. The falls have accelerated recently, with the share price down 48% in the last three months. But this could be related to the weak market, which is down 22% in the same period.
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.
See our latest analysis for Great Wall Belt & Road Holdings
Great Wall Belt & Road Holdings 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 Great Wall Belt & Road Holdings reduced its trailing twelve month revenue by 1.6% for each year. While far from catastrophic that is not good. If a business loses money, you want it to grow, so no surprises that the share price has dropped 37% each year in that time. We're generally averse to companies with declining revenues, but we're not alone in that. Fear of becoming a 'bagholder' may be keeping people away from this stock.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Great Wall Belt & Road Holdings's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market lost about 23% in the twelve months, Great Wall Belt & Road Holdings shareholders did even worse, losing 69%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 37% 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. It's always interesting to track share price performance over the longer term. But to understand Great Wall Belt & Road Holdings better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Great Wall Belt & Road Holdings you should be aware of, and 1 of them is a bit unpleasant.
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 HK exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
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March 24, 2020 at 10:47AM
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Easy Come, Easy Go: How Great Wall Belt & Road Holdings (HKG:524) Shareholders Got Unlucky And Saw 90% Of Their Cash Evaporate - Yahoo Finance
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