Reflecting on Shougang Concord Grand (Group)'s (HKG:730) Share Price Returns Over The Last Five Years

We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. To wit, the Shougang Concord Grand (Group) Limited (HKG:730) share price managed to fall 68% over five long years. That's an unpleasant experience for long term holders. On top of that, the share price is down 8.0% in the last week.

See our latest analysis for Shougang Concord Grand (Group)

Because Shougang Concord Grand (Group) 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over five years, Shougang Concord Grand (Group) grew its revenue at 23% per year. That's better than most loss-making companies. In contrast, the share price is has averaged a loss of 11% per year - that's quite disappointing. This could mean high expectations have been tempered, potentially because investors are looking to the bottom line. If you think the company can keep up its revenue growth, you'd have to consider the possibility that there's an opportunity here.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Shougang Concord Grand (Group)'s earnings, revenue and cash flow.

A Different Perspective

Shougang Concord Grand (Group) shareholders are down 14% for the year, but the market itself is up 6.1%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, longer term shareholders are suffering worse, given the loss of 11% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. 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. Take risks, for example - Shougang Concord Grand (Group) has 1 warning sign we think you should be aware of.

Shougang Concord Grand (Group) is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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