LingNan Eco&Culture-TourismLtd (SZSE:002717 investor five-year losses grow to 45% as the stock sheds CN¥783m this past week

For many, the main point of investing is to generate higher returns than the overall market. But the main game is to find enough winners to more than offset the losers So we wouldn't blame long term LingNan Eco&Culture-Tourism Co.,Ltd. (SZSE:002717) shareholders for doubting their decision to hold, with the stock down 45% over a half decade. Unfortunately the share price momentum is still quite negative, with prices down 23% in thirty days.

If the past week is anything to go by, investor sentiment for LingNan Eco&Culture-TourismLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for LingNan Eco&Culture-TourismLtd

Because LingNan Eco&Culture-TourismLtd 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.

In the last five years LingNan Eco&Culture-TourismLtd saw its revenue shrink by 33% per year. That puts it in an unattractive cohort, to put it mildly. It seems pretty reasonable to us that the share price dipped 8% per year in that time. We doubt many shareholders are delighted with this share price performance. It is possible for businesses to bounce back but as Buffett says, 'turnarounds seldom turn'.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

LingNan Eco&Culture-TourismLtd shareholders are up 12% for the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 8% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. To that end, you should be aware of the 3 warning signs we've spotted with LingNan Eco&Culture-TourismLtd .

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.