Shanghai Aerospace Automobile Electromechanical (SHSE:600151) shareholders are up 16% this past week, but still in the red over the last three years

Shanghai Aerospace Automobile Electromechanical Co., Ltd. (SHSE:600151) shareholders will doubtless be very grateful to see the share price up 36% in the last quarter. But that doesn't change the fact that the returns over the last three years have been less than pleasing. Truth be told the share price declined 43% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Shanghai Aerospace Automobile Electromechanical

Shanghai Aerospace Automobile Electromechanical 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 desire 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, Shanghai Aerospace Automobile Electromechanical saw its revenue grow by 13% per year, compound. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 13% per year, for three years. This implies the market had higher expectations of Shanghai Aerospace Automobile Electromechanical. With revenue growing at a solid clip, now might be the time to focus on the possibility that it will have a brighter future.

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

This free interactive report on Shanghai Aerospace Automobile Electromechanical's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that Shanghai Aerospace Automobile Electromechanical shareholders are down 20% for the year. Unfortunately, that's worse than the broader market decline of 10%. 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. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. For example, we've discovered 1 warning sign for Shanghai Aerospace Automobile Electromechanical that you should be aware of before investing here.

But note: Shanghai Aerospace Automobile Electromechanical 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 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.