Hengyuan Refining Company Berhad's(KLSE:HENGYUAN) Share Price Is Down 72% Over The Past Three Years.

As an investor, mistakes are inevitable. But you have a problem if you face massive losses more than once in a while. So consider, for a moment, the misfortune of Hengyuan Refining Company Berhad (KLSE:HENGYUAN) investors who have held the stock for three years as it declined a whopping 72%. That would be a disturbing experience. And the ride hasn't got any smoother in recent times over the last year, with the price 32% lower in that time. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 8.7%. However, this may be a matter of broader market optimism, since stocks are up 4.4% in the same time.

View our latest analysis for Hengyuan Refining Company Berhad

Hengyuan Refining Company Berhad isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last three years, Hengyuan Refining Company Berhad saw its revenue grow by 1.4% per year, compound. Given it's losing money in pursuit of growth, we are not really impressed with that. But the share price crash at 20% per year does seem a bit harsh! While we're definitely wary of the stock, after that kind of performance, it could be an over-reaction. Before considering a purchase, take a look at the losses the company is racking up.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at Hengyuan Refining Company Berhad's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 4.6% in the last year, Hengyuan Refining Company Berhad shareholders lost 32%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Even so, be aware that Hengyuan Refining Company Berhad is showing 1 warning sign in our investment analysis , you should know about...

We will like Hengyuan Refining Company Berhad 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 MY exchanges.

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