Investors in Liuzhou Iron&Steel (SHSE:601003) from three years ago are still down 40%, even after 12% gain this past week

Liuzhou Iron&Steel Co., Ltd (SHSE:601003) shareholders should be happy to see the share price up 18% in the last month. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 43% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

The recent uptick of 12% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Liuzhou Iron&Steel

Liuzhou Iron&Steel wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last three years, Liuzhou Iron&Steel's revenue dropped 6.8% per year. That is not a good result. The stock has disappointed holders over the last three years, falling 13%, annualized. That makes sense given the lack of either profits or revenue growth. Of course, sentiment could become too negative, and the company may actually be making progress to profitability.

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

This free interactive report on Liuzhou Iron&Steel's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Liuzhou Iron&Steel's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Liuzhou Iron&Steel shareholders, and that cash payout explains why its total shareholder loss of 40%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

Liuzhou Iron&Steel shareholders are up 11% for the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 5% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. To that end, you should be aware of the 2 warning signs we've spotted with Liuzhou Iron&Steel .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.