Da Ming International Holdings (HKG:1090 investor three-year losses grow to 77% as the stock sheds HK$115m this past week

As every investor would know, not every swing hits the sweet spot. But you want to avoid the really big losses like the plague. So spare a thought for the long term shareholders of Da Ming International Holdings Limited (HKG:1090); the share price is down a whopping 78% in the last three years. That would be a disturbing experience. The more recent news is of little comfort, with the share price down 55% in a year. The falls have accelerated recently, with the share price down 29% in the last three months.

After losing 11% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Da Ming International Holdings

Given that Da Ming International Holdings 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over three years, Da Ming International Holdings grew revenue at 10.0% per year. That's a fairly respectable growth rate. So it seems unlikely the 21% share price drop (each year) is entirely about the revenue. More likely, the market was spooked by the cost of that revenue. This is exactly why investors need to diversify - even when a loss making company grows revenue, it can fail to deliver for shareholders.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on Da Ming International Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in Da Ming International Holdings had a tough year, with a total loss of 55%, against a market gain of about 11%. 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, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 9% over the last half decade. 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 Da Ming International Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Da Ming International Holdings , and understanding them should be part of your investment process.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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

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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.