Shareholders in AnnilLtd (SZSE:002875) have lost 33%, as stock drops 11% 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 Annil Co.,Ltd (SZSE:002875) shareholders for doubting their decision to hold, with the stock down 33% over a half decade. And it's not just long term holders hurting, because the stock is down 27% in the last year. In the last ninety days we've seen the share price slide 47%.

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

View our latest analysis for AnnilLtd

Because AnnilLtd 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over half a decade AnnilLtd reduced its trailing twelve month revenue by 6.7% for each year. That's not what investors generally want to see. The stock hasn't done well for shareholders in the last five years, falling 6%, annualized. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. 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).

Take a more thorough look at AnnilLtd's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that AnnilLtd shareholders are down 27% for the year. Unfortunately, that's worse than the broader market decline of 12%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. 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. 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 instance, we've identified 3 warning signs for AnnilLtd (2 make us uncomfortable) that you should be aware of.

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.