Stock Analysis

Even though Best Food Holding (HKG:1488) has lost HK$205m market cap in last 7 days, shareholders are still up 33% over 3 years

SEHK:1488
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Best Food Holding Company Limited (HKG:1488) shareholders might be concerned after seeing the share price drop 19% in the last quarter. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 33% during that period.

In light of the stock dropping 14% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

See our latest analysis for Best Food Holding

Because Best Food 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 it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Best Food Holding actually saw its revenue drop by 9.1% per year over three years. Despite the lack of revenue growth, the stock has returned 10%, compound, over three years. Unless the company is going to make profits soon, we would be pretty cautious about it.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
SEHK:1488 Earnings and Revenue Growth May 27th 2024

Take a more thorough look at Best Food Holding's financial health with this free report on its balance sheet.

A Different Perspective

Investors in Best Food Holding had a tough year, with a total loss of 16%, against a market gain of about 7.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Best Food Holding better, we need to consider many other factors. Even so, be aware that Best Food Holding is showing 1 warning sign in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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

Valuation is complex, but we're helping make it simple.

Find out whether Best Food Holding is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.