While shareholders of MCC Meili Cloud Computing Industry Investment (SZSE:000815) are in the black over 3 years, those who bought a week ago aren't so fortunate

It hasn't been the best quarter for MCC Meili Cloud Computing Industry Investment Co., Ltd (SZSE:000815) shareholders, since the share price has fallen 14% in that time. But that doesn't change the fact that the returns over the last three years have been pleasing. In the last three years the share price is up, 43%: better than the market.

Since the long term performance has been good but there's been a recent pullback of 6.9%, let's check if the fundamentals match the share price.

Check out our latest analysis for MCC Meili Cloud Computing Industry Investment

MCC Meili Cloud Computing Industry Investment 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

MCC Meili Cloud Computing Industry Investment actually saw its revenue drop by 5.4% per year over three years. Despite the lack of revenue growth, the stock has returned 13%, compound, over three years. Unless the company is going to make profits soon, we would be pretty cautious about it.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

While the broader market lost about 9.7% in the twelve months, MCC Meili Cloud Computing Industry Investment shareholders did even worse, losing 25%. 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 5% per year over five years. 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. Case in point: We've spotted 2 warning signs for MCC Meili Cloud Computing Industry Investment 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.