Investors might be losing patience for Shandong Hontron Aluminum Industry Holding's (SZSE:002379) increasing losses, as stock sheds 5.6% over the past week

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Shandong Hontron Aluminum Industry Holding Company Limited (SZSE:002379) share price has soared 193% in the last three years. That sort of return is as solid as granite. On top of that, the share price is up 39% in about a quarter.

While the stock has fallen 5.6% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

Check out our latest analysis for Shandong Hontron Aluminum Industry Holding

Because Shandong Hontron Aluminum Industry Holding 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Shandong Hontron Aluminum Industry Holding actually saw its revenue drop by 4.9% per year over three years. So the share price gain of 43% per year is quite surprising. It's fair to say shareholders are definitely counting on a bright future.

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

If you are thinking of buying or selling Shandong Hontron Aluminum Industry Holding stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Shandong Hontron Aluminum Industry Holding shareholders have received a total shareholder return of 128% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. For instance, we've identified 1 warning sign for Shandong Hontron Aluminum Industry Holding 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.