Shareholders have faith in loss-making Yieh Hsing Enterprise (TWSE:2007) as stock climbs 14% in past week, taking five-year gain to 148%

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on a lighter note, a good company can see its share price rise well over 100%. Long term Yieh Hsing Enterprise Co., Ltd. (TWSE:2007) shareholders would be well aware of this, since the stock is up 148% in five years. Better yet, the share price has risen 14% in the last week.

Since it's been a strong week for Yieh Hsing Enterprise shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Yieh Hsing Enterprise

Yieh Hsing Enterprise 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. 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 Yieh Hsing Enterprise saw its revenue shrink by 3.7% per year. On the other hand, the share price done the opposite, gaining 20%, compound, each year. It just goes to show tht the market is forward looking, and it's not always easy to predict the future based on past trends. Still, this situation makes us a little wary of the stock.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at Yieh Hsing Enterprise's financial health with this free report on its balance sheet.

A Different Perspective

Yieh Hsing Enterprise provided a TSR of 19% over the last twelve months. Unfortunately this falls short of the market return. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 20% over five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. 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 Yieh Hsing Enterprise is showing 2 warning signs in our investment analysis , you should know about...

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 Taiwanese 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.