Investors five-year losses continue as Hunan Copote Science TechnologyLtd (SHSE:600476) dips a further 11% this week, earnings continue to decline

For many, the main point of investing is to generate higher returns than the overall market. But every investor is virtually certain to have both over-performing and under-performing stocks. At this point some shareholders may be questioning their investment in Hunan Copote Science Technology Co.,Ltd. (SHSE:600476), since the last five years saw the share price fall 46%. And some of the more recent buyers are probably worried, too, with the stock falling 33% in the last year. The falls have accelerated recently, with the share price down 23% in the last three months.

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

See our latest analysis for Hunan Copote Science TechnologyLtd

Given that Hunan Copote Science TechnologyLtd only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last half decade, Hunan Copote Science TechnologyLtd saw its revenue increase by 16% per year. That's well above most other pre-profit companies. The share price drop of 8% per year over five years would be considered let down. You could say that the market has been harsh, given the top line growth. So now is probably an apt time to look closer at the stock, if you think it has potential.

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 Hunan Copote Science TechnologyLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 10% in the twelve months, Hunan Copote Science TechnologyLtd shareholders did even worse, losing 33%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. To that end, you should be aware of the 2 warning signs we've spotted with Hunan Copote Science TechnologyLtd .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.