Investors are selling off Yulho (KOSDAQ:072770), lack of profits no doubt contribute to shareholders one-year loss

Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Yulho Co., Ltd. (KOSDAQ:072770) have suffered share price declines over the last year. To wit the share price is down 54% in that time. At least the damage isn't so bad if you look at the last three years, since the stock is down 28% in that time. Shareholders have had an even rougher run lately, with the share price down 46% in the last 90 days.

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

See our latest analysis for Yulho

Given that Yulho 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. Shareholders of unprofitable companies usually desire strong revenue growth. 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.

In just one year Yulho saw its revenue fall by 8.1%. That's not what investors generally want to see. The share price drop of 54% is understandable given the company doesn't have profits to boast of. Fingers crossed this is the low ebb for the stock. We don't generally like to own companies with falling revenues and no profits, so we're pretty cautious of this one, at the moment.

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

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

A Different Perspective

While the broader market gained around 0.4% in the last year, Yulho shareholders lost 54%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 0.8% 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. 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 - Yulho has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

We will like Yulho better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 South Korean 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.