Southern Steel Berhad's(KLSE:SSTEEL) Share Price Is Down 67% Over The Past Three Years.

It is doubtless a positive to see that the Southern Steel Berhad (KLSE:SSTEEL) share price has gained some 52% in the last three months. Meanwhile over the last three years the stock has dropped hard. In that time, the share price dropped 67%. So it's good to see it climbing back up. After all, could be that the fall was overdone.

Check out our latest analysis for Southern Steel Berhad

Southern Steel 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. Shareholders of unprofitable companies usually expect 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 the last three years Southern Steel Berhad saw its revenue shrink by 17% per year. That means its revenue trend is very weak compared to other loss making companies. Arguably, the market has responded appropriately to this business performance by sending the share price down 19% (annualized) in the same time period. When revenue is dropping, and losses are still costing, and the share price sinking fast, it's fair to ask if something is remiss. It could be a while before the company repays long suffering shareholders with share price gains.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While the broader market gained around 4.3% in the last year, Southern Steel Berhad shareholders lost 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.4% per year over five years. 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. 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. Even so, be aware that Southern Steel Berhad is showing 3 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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