Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Shandong Ruyi Woolen Garment Group Co., Ltd. (SZSE:002193) share price is down 49% in the last year. That's disappointing when you consider the market declined 26%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 7.9% in three years. Even worse, it's down 31% in about a month, which isn't fun at all. We do note, however, that the broader market is down 14% in that period, and this may have weighed on the share price.

With the stock having lost 26% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Shandong Ruyi Woolen Garment Group isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Shandong Ruyi Woolen Garment Group's revenue didn't grow at all in the last year. In fact, it fell 60%. That looks like a train-wreck result to investors far and wide. Meanwhile, the share price dropped by 49%. It's always work digging deeper, but we'd probably need to see a strong balance sheet and bottom line improvements to get interested in this one.

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. It might be well worthwhile taking a look at our free report on Shandong Ruyi Woolen Garment Group's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Shandong Ruyi Woolen Garment Group shareholders are down 49% for the year. Unfortunately, that's worse than the broader market decline of 26%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. 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 Shandong Ruyi Woolen Garment Group better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Shandong Ruyi Woolen Garment Group you should be aware of, and 2 of them can't be ignored.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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