Anhui Jianghuai Automobile GroupLtd (SHSE:600418) shareholders are still up 193% over 5 years despite pulling back 4.5% in the past week

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. One great example is Anhui Jianghuai Automobile Group Corp.,Ltd. (SHSE:600418) which saw its share price drive 191% higher over five years. On the other hand, the stock price has retraced 4.5% in the last week. But this could be related to the soft market, with stocks selling off around 2.2% in the last week.

Since the long term performance has been good but there's been a recent pullback of 4.5%, let's check if the fundamentals match the share price.

See our latest analysis for Anhui Jianghuai Automobile GroupLtd

While Anhui Jianghuai Automobile GroupLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last half decade Anhui Jianghuai Automobile GroupLtd's revenue has actually been trending down at about 4.1% per year. Given that scenario, we wouldn't have expected the share price to rise 24% per year, but that's what it did. It just goes to show tht the market is forward looking, and it's not always easy to predict the future based on past trends. Still, this situation makes us a little wary of the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So it makes a lot of sense to check out what analysts think Anhui Jianghuai Automobile GroupLtd will earn in the future (free profit forecasts).

A Different Perspective

It's good to see that Anhui Jianghuai Automobile GroupLtd has rewarded shareholders with a total shareholder return of 26% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 24% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Anhui Jianghuai Automobile GroupLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Anhui Jianghuai Automobile GroupLtd you should know about.

We will like Anhui Jianghuai Automobile GroupLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com