Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Allied Sustainability and Environmental Consultants Group Limited (HKG:8320) share price slid 13% over twelve months. That contrasts poorly with the market return of -6.2%. Allied Sustainability and Environmental Consultants Group hasn’t been listed for long, so although we’re wary of recent listings that perform poorly, it may still prove itself with time. Even worse, it’s down 10% in about a month, which isn’t fun at all. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Given that Allied Sustainability and Environmental Consultants Group 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. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Allied Sustainability and Environmental Consultants Group’s revenue didn’t grow at all in the last year. In fact, it fell 28%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 13% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Take a more thorough look at Allied Sustainability and Environmental Consultants Group’s financial health with this free report on its balance sheet.
A Different Perspective
Allied Sustainability and Environmental Consultants Group shareholders are down 13% for the year, even worse than the market loss of 6.2%. That’s disappointing, but it’s worth keeping in mind that the market-wide selling wouldn’t have helped. With the stock down 0.6% over the last three months, the market doesn’t seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. Before spending more time on Allied Sustainability and Environmental Consultants Group it might be wise to click here to see if insiders have been buying or selling shares.
Of course Allied Sustainability and Environmental Consultants Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.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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If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.