Simmtech Holdings (KOSDAQ:036710 shareholders incur further losses as stock declines 10% this week, taking three-year losses to 42%

Many investors define successful investing as beating the market average over the long term. But the risk of stock picking is that you will likely buy under-performing companies. Unfortunately, that's been the case for longer term Simmtech Holdings Co., Ltd. (KOSDAQ:036710) shareholders, since the share price is down 44% in the last three years, falling well short of the market decline of around 14%. And the ride hasn't got any smoother in recent times over the last year, with the price 39% lower in that time. Furthermore, it's down 30% in about a quarter. That's not much fun for holders.

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

See our latest analysis for Simmtech Holdings

Simmtech Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years Simmtech Holdings saw its revenue shrink by 5.4% per year. That's not what investors generally want to see. The stock has disappointed holders over the last three years, falling 13%, annualized. That makes sense given the lack of either profits or revenue growth. However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

While the broader market lost about 2.4% in the twelve months, Simmtech Holdings shareholders did even worse, losing 39% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Simmtech Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for Simmtech Holdings (2 can't be ignored!) that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.