Would Shareholders Who Purchased China Yurun Food Group's (HKG:1068) Stock Five Years Be Happy With The Share price Today?

We think intelligent long term investing is the way to go. But unfortunately, some companies simply don't succeed. For example the China Yurun Food Group Limited (HKG:1068) share price dropped 53% over five years. That is extremely sub-optimal, to say the least. The good news is that the stock is up 1.4% in the last week.

Check out our latest analysis for China Yurun Food Group

Because China Yurun Food 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last five years China Yurun Food Group saw its revenue shrink by 8.3% per year. While far from catastrophic that is not good. The share price decline of 9% compound, over five years, is understandable given the company is losing money, and revenue is moving in the wrong direction. We don't think anyone is rushing to buy this stock. Ultimately, it may be worth watching - should revenue pick up, the share price might follow.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on China Yurun Food Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

China Yurun Food Group shareholders are down 9.8% for the year, but the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 9% 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. 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. Take risks, for example - China Yurun Food Group has 1 warning sign we think you should be aware of.

We will like China Yurun Food Group 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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