TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT (SZSE:000826 investor five-year losses grow to 81% as the stock sheds CN¥499m this past week

Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. For example, we sympathize with anyone who was caught holding TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT Co., LTD. (SZSE:000826) during the five years that saw its share price drop a whopping 81%. And some of the more recent buyers are probably worried, too, with the stock falling 38% in the last year. Furthermore, it's down 18% in about a quarter. That's not much fun for holders. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

If the past week is anything to go by, investor sentiment for TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT

TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last five years TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT saw its revenue shrink by 13% per year. That's definitely a weaker result than most pre-profit companies report. So it's not altogether surprising to see the share price down 13% per year in the same time period. This kind of price performance makes us very wary, especially when combined with falling revenue. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We regret to report that TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT shareholders are down 38% for the year. Unfortunately, that's worse than the broader market decline of 11%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Take risks, for example - TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT has 2 warning signs (and 1 which can't be ignored) we think you should know about.

But note: TUS ENVIRONMENTAL SCIENCE AND TECHNOLOGY DEVELOPMENT 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.