China Jo-Jo Drugstores' (NASDAQ:CJJD) Stock Price Has Reduced 24% In The Past Five Years

Ideally, your overall portfolio should beat the market average. But the main game is to find enough winners to more than offset the losers So we wouldn't blame long term China Jo-Jo Drugstores, Inc. (NASDAQ:CJJD) shareholders for doubting their decision to hold, with the stock down 24% over a half decade. And we doubt long term believers are the only worried holders, since the stock price has declined 22% over the last twelve months. The good news is that the stock is up 21% in the last week.

See our latest analysis for China Jo-Jo Drugstores

Given that China Jo-Jo Drugstores 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. When a company doesn't make profits, we'd generally expect 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.

Over five years, China Jo-Jo Drugstores grew its revenue at 8.4% per year. That's a fairly respectable growth rate. Shareholders have seen the share price fall at 4% per year, for five years: a poor performance. Those who bought back then clearly believed in stronger growth - and maybe even profits. The lesson is that if you buy shares in a money losing company you could end up losing money.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

While the broader market gained around 28% in the last year, China Jo-Jo Drugstores shareholders lost 22%. 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, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand China Jo-Jo Drugstores better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for China Jo-Jo Drugstores you should be aware of, and 1 of them doesn't sit too well with us.

But note: China Jo-Jo Drugstores may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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