Investors in Shanghai New Power Automotive Technology (SHSE:600841) from three years ago are still down 55%, even after 8.2% gain this past week

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Shanghai New Power Automotive Technology Company Limited (SHSE:600841) shareholders have had a particularly rough ride in the last three year. Regrettably, they have had to cope with a 56% drop in the share price over that period. The falls have accelerated recently, with the share price down 27% in the last three months.

On a more encouraging note the company has added CN¥513m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

Check out our latest analysis for Shanghai New Power Automotive Technology

Shanghai New Power Automotive Technology isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 New Power Automotive Technology saw its revenue shrink by 44% per year. That's definitely a weaker result than most pre-profit companies report. With no profits and falling revenue it is no surprise that investors have been dumping the stock, pushing the price down by 16% per year over that time. When revenue is dropping, and losses are still costing, and the share price sinking fast, it's fair to ask if something is remiss. After losing money on a declining business with falling stock price, we always consider whether eager bagholders are still offering us a reasonable exit price.

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

This free interactive report on Shanghai New Power Automotive Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Shanghai New Power Automotive Technology has rewarded shareholders with a total shareholder return of 44% in the last twelve months. That certainly beats the loss of about 4% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. To that end, you should learn about the 2 warning signs we've spotted with Shanghai New Power Automotive Technology (including 1 which is concerning) .

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.