Even after rising 8.2% this past week, Shandong Sinobioway Biomedicine (SZSE:002581) shareholders are still down 32% over the past three years

Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Shandong Sinobioway Biomedicine Co., Ltd. (SZSE:002581) shareholders, since the share price is down 32% in the last three years, falling well short of the market decline of around 8.2%. Shareholders have had an even rougher run lately, with the share price down 19% in the last 90 days.

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Shandong Sinobioway Biomedicine

Given that Shandong Sinobioway Biomedicine 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over three years, Shandong Sinobioway Biomedicine grew revenue at 3.4% per year. Given it's losing money in pursuit of growth, we are not really impressed with that. Indeed, the stock dropped 10% over the last three years. If revenue growth accelerates, we might see the share price bounce. But ultimately the key will be whether the company can become profitability.

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

This free interactive report on Shandong Sinobioway Biomedicine's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in Shandong Sinobioway Biomedicine had a tough year, with a total loss of 4.8%, against a market gain of about 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Take risks, for example - Shandong Sinobioway Biomedicine has 1 warning sign we think you should be aware of.

But note: Shandong Sinobioway Biomedicine may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.