While shareholders of Qinchuan Machine Tool & Tool Group Share (SZSE:000837) are in the black over 5 years, those who bought a week ago aren't so fortunate

Qinchuan Machine Tool & Tool Group Share Co., Ltd. (SZSE:000837) shareholders might be concerned after seeing the share price drop 13% in the last quarter. On the bright side the returns have been quite good over the last half decade. It has returned a market beating 76% in that time. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 33% drop, in the last year.

While the stock has fallen 6.0% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Qinchuan Machine Tool & Tool Group Share

While Qinchuan Machine Tool & Tool Group Share 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. It would be hard to believe in a more profitable future without growing revenues.

For the last half decade, Qinchuan Machine Tool & Tool Group Share can boast revenue growth at a rate of 4.0% per year. Put simply, that growth rate fails to impress. While it's hard to say just how much value the company added over five years, the annualised share price gain of 12% seems about right. We'd be looking for the underlying business to grow revenue a bit faster.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Qinchuan Machine Tool & Tool Group Share'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 Qinchuan Machine Tool & Tool Group Share shareholders are down 33% for the year. Unfortunately, that's worse than the broader market decline of 10%. 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. On the bright side, long term shareholders have made money, with a gain of 12% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Qinchuan Machine Tool & Tool Group Share better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Qinchuan Machine Tool & Tool Group Share .

But note: Qinchuan Machine Tool & Tool Group Share 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.