Shareholders in Southern Steel Berhad (KLSE:SSTEEL) have lost 52%, as stock drops 15% this past week

We think intelligent long term investing is the way to go. But no-one is immune from buying too high. For example, after five long years the Southern Steel Berhad (KLSE:SSTEEL) share price is a whole 52% lower. That is extremely sub-optimal, to say the least. Even worse, it's down 17% in about a month, which isn't fun at all. We do note, however, that the broader market is down 7.6% in that period, and this may have weighed on the share price.

Since Southern Steel Berhad has shed RM51m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Southern Steel Berhad

Because Southern Steel Berhad 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. When a company doesn't make profits, we'd generally hope to see good 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 the last five years Southern Steel Berhad saw its revenue shrink by 3.2% per year. While far from catastrophic that is not good. With neither profit nor revenue growth, the loss of 9% per year doesn't really surprise us. We don't think anyone is rushing to buy this stock. Not that many investors like to invest in companies that are losing money and not growing revenue.

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 Southern Steel Berhad'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 12% in the last year, Southern Steel Berhad shareholders lost 2.9%. 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, longer term shareholders are suffering worse, given the loss of 9% doled out over the last five years. We'd need to see some sustained improvements in the key metrics before we could muster much enthusiasm. It's always interesting to track share price performance over the longer term. But to understand Southern Steel Berhad better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Southern Steel Berhad .

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 Malaysian 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com