Shaanxi Heimao Coking (SHSE:601015 shareholders incur further losses as stock declines 9.7% this week, taking three-year losses to 49%

For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. We regret to report that long term Shaanxi Heimao Coking Co., Ltd. (SHSE:601015) shareholders have had that experience, with the share price dropping 50% in three years, versus a market decline of about 14%. The more recent news is of little comfort, with the share price down 26% in a year. And the share price decline continued over the last week, dropping some 9.7%.

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

View our latest analysis for Shaanxi Heimao Coking

Given that Shaanxi Heimao Coking didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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, Shaanxi Heimao Coking's revenue dropped 5.7% per year. That is not a good result. The annual decline of 14% per year in that period has clearly disappointed holders. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

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

If you are thinking of buying or selling Shaanxi Heimao Coking stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market gained around 15% in the last year, Shaanxi Heimao Coking shareholders lost 26%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 5% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Shaanxi Heimao Coking better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Shaanxi Heimao Coking you should be aware of.

Of course Shaanxi Heimao Coking may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.