Investors in Jiangsu Daybright Intelligent ElectricLTD (SZSE:300670) from five years ago are still down 21%, even after 30% gain this past week

Jiangsu Daybright Intelligent Electric Co.,LTD. (SZSE:300670) shareholders will doubtless be very grateful to see the share price up 47% in the last quarter. But that doesn't change the fact that the returns over the last five years have been less than pleasing. You would have done a lot better buying an index fund, since the stock has dropped 22% in that half decade.

The recent uptick of 30% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Jiangsu Daybright Intelligent ElectricLTD

Jiangsu Daybright Intelligent ElectricLTD isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over half a decade Jiangsu Daybright Intelligent ElectricLTD reduced its trailing twelve month revenue by 0.3% for each year. While far from catastrophic that is not good. The share price decline at a rate of 4% per year is disappointing. But it doesn't surprise given the falling revenue. Without profits, its hard to see how shareholders win if the revenue keeps falling.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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 interactive report on Jiangsu Daybright Intelligent ElectricLTD's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that Jiangsu Daybright Intelligent ElectricLTD shareholders are down 19% for the year. Unfortunately, that's worse than the broader market decline of 9.1%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Jiangsu Daybright Intelligent ElectricLTD , and understanding them should be part of your investment process.

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.