Reflecting on Tang Eng Iron Works' (GTSM:2035) Share Price Returns Over The Last Three Years

Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. We regret to report that long term Tang Eng Iron Works Co., Ltd. (GTSM:2035) shareholders have had that experience, with the share price dropping 13% in three years, versus a market return of about 52%. The good news is that the stock is up 1.7% in the last week.

See our latest analysis for Tang Eng Iron Works

Tang Eng Iron Works wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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 Tang Eng Iron Works saw its revenue shrink by 20% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 4% compound, over three years is well justified by the fundamental deterioration. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

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 Tang Eng Iron Works' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in Tang Eng Iron Works had a tough year, with a total loss of 2.5%, against a market gain of about 24%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 2% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. It's always interesting to track share price performance over the longer term. But to understand Tang Eng Iron Works better, we need to consider many other factors. For example, we've discovered 2 warning signs for Tang Eng Iron Works that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on TW exchanges.

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This article by Simply Wall St is general in nature. 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.
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