While World Precision Machinery (SGX:B49) shareholders have made 146% in 5 years, increasing losses might now be front of mind as stock sheds 11% this week

It hasn't been the best quarter for World Precision Machinery Limited (SGX:B49) shareholders, since the share price has fallen 26% in that time. But that doesn't change the fact that the returns over the last five years have been pleasing. It has returned a market beating 37% in that time.

Although World Precision Machinery has shed S$12m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for World Precision Machinery

Given that World Precision Machinery 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 the last 5 years World Precision Machinery saw its revenue grow at 4.6% per year. Put simply, that growth rate fails to impress. The modest growth is probably broadly reflected in the share price, which is up 7%, per year over 5 years. The business could be one worth watching but we generally prefer faster revenue growth.

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

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

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of World Precision Machinery, it has a TSR of 146% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

Investors in World Precision Machinery had a tough year, with a total loss of 7.1% (including dividends), against a market gain of about 8.4%. 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. Longer term investors wouldn't be so upset, since they would have made 20%, 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 World Precision Machinery better, we need to consider many other factors. For example, we've discovered 4 warning signs for World Precision Machinery (3 are concerning!) that you should be aware of before investing here.

We will like World Precision Machinery 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 Singaporean 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.