Jianglong Shipbuilding (SZSE:300589) stock falls 15% in past week as three-year earnings and shareholder returns continue downward trend

For many investors, the main point of stock picking is to generate higher returns than the overall market. But if you try your hand at stock picking, your risk returning less than the market. We regret to report that long term Jianglong Shipbuilding Co., Ltd. (SZSE:300589) shareholders have had that experience, with the share price dropping 39% in three years, versus a market decline of about 18%. And over the last year the share price fell 26%, so we doubt many shareholders are delighted. Furthermore, it's down 22% in about a quarter. That's not much fun for holders.

After losing 15% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Jianglong Shipbuilding

We don't think that Jianglong Shipbuilding's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last three years, Jianglong Shipbuilding saw its revenue grow by 14% per year, compound. That's a fairly respectable growth rate. Shareholders have endured a share price decline of 12% per year. This implies the market had higher expectations of Jianglong Shipbuilding. However, that's in the past now, and it's the future is more important - and the future looks brighter (based on revenue, anyway).

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free report showing analyst forecasts should help you form a view on Jianglong Shipbuilding

A Different Perspective

We regret to report that Jianglong Shipbuilding shareholders are down 26% for the year. Unfortunately, that's worse than the broader market decline of 17%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Jianglong Shipbuilding better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Jianglong Shipbuilding , and understanding them should be part of your investment process.

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.