Hubei Sanxia New Building Materials (SHSE:600293 investor five-year losses grow to 51% as the stock sheds CN¥522m this past week

Statistically speaking, long term investing is a profitable endeavour. But along the way some stocks are going to perform badly. Zooming in on an example, the Hubei Sanxia New Building Materials Co., Ltd. (SHSE:600293) share price dropped 51% in the last half decade. That is extremely sub-optimal, to say the least. The falls have accelerated recently, with the share price down 25% in the last three months.

Since Hubei Sanxia New Building Materials has shed CN¥522m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Hubei Sanxia New Building Materials

Because Hubei Sanxia New Building Materials 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over half a decade Hubei Sanxia New Building Materials reduced its trailing twelve month revenue by 34% for each year. That puts it in an unattractive cohort, to put it mildly. Arguably, the market has responded appropriately to this business performance by sending the share price down 9% (annualized) in the same time period. It's fair to say most investors don't like to invest in loss making companies with falling revenue. This looks like a really risky stock to buy, at a glance.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Hubei Sanxia New Building Materials' financial health with this free report on its balance sheet.

A Different Perspective

While it's certainly disappointing to see that Hubei Sanxia New Building Materials shares lost 3.4% throughout the year, that wasn't as bad as the market loss of 17%. What is more upsetting is the 9% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. 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. Case in point: We've spotted 1 warning sign for Hubei Sanxia New Building Materials you should be aware of.

Of course Hubei Sanxia New Building Materials may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.