Sadbhav Engineering (NSE:SADBHAV shareholders incur further losses as stock declines 11% this week, taking five-year losses to 77%

We're definitely into long term investing, but some companies are simply bad investments over any time frame. It hits us in the gut when we see fellow investors suffer a loss. Anyone who held Sadbhav Engineering Limited (NSE:SADBHAV) for five years would be nursing their metaphorical wounds since the share price dropped 77% in that time. The last week also saw the share price slip down another 11%.

If the past week is anything to go by, investor sentiment for Sadbhav Engineering isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Sadbhav Engineering

Because Sadbhav Engineering 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. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

Over half a decade Sadbhav Engineering reduced its trailing twelve month revenue by 21% for each year. That's definitely a weaker result than most pre-profit companies report. So it's not that strange that the share price dropped 12% per year in that period. We don't think this is a particularly promising picture. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

If you are thinking of buying or selling Sadbhav Engineering stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Sadbhav Engineering shareholders have received a total shareholder return of 67% over one year. That certainly beats the loss of about 12% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. For instance, we've identified 4 warning signs for Sadbhav Engineering (2 are concerning) that you should be aware of.

But note: Sadbhav Engineering may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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