If You Had Bought Huasheng International Holding (HKG:1323) Stock Three Years Ago, You Could Pocket A 86% Gain Today

One simple way to benefit from the stock market is to buy an index fund. But if you pick the right individual stocks, you could make more than that. Just take a look at Huasheng International Holding Limited (HKG:1323), which is up 86%, over three years, soundly beating the market decline of 14% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 45%.

View our latest analysis for Huasheng International Holding

Huasheng International Holding isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Huasheng International Holding's revenue trended up 64% each year over three years. That's much better than most loss-making companies. While the compound gain of 23% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put Huasheng International Holding on your radar. A window of opportunity may reveal itself with time, if the business can trend to profitability.

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 Huasheng International Holding stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Huasheng International Holding shareholders have received a total shareholder return of 45% over one year. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. For example, we've discovered 1 warning sign for Huasheng International Holding that you should be aware of before investing here.

We will like Huasheng International Holding better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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This article by Simply Wall St is general in nature. 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.
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