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 18% in the last month. Looking further back, the stock has generated good profits over five years. It has returned a market beating 87% in that time.

In light of the stock dropping 13% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

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

Given that Qinchuan Machine Tool & Tool Group Share only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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.

In the last 5 years Qinchuan Machine Tool & Tool Group Share saw its revenue grow at 1.4% per year. Put simply, that growth rate fails to impress. The modest growth is probably broadly reflected in the share price, which is up 13%, per year over 5 years. We'd be looking for the underlying business to grow revenue a bit faster.

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 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

While the broader market gained around 6.1% in the last year, Qinchuan Machine Tool & Tool Group Share shareholders lost 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 13% 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. 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 2 warning signs for Qinchuan Machine Tool & Tool Group Share that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.