Hebei Sailhero Environmental Protection High-tech Co.,Ltd (SZSE:300137) shareholders should be happy to see the share price up 23% in the last quarter. But over the last half decade, the stock has not performed well. In fact, the share price is down 29%, which falls well short of the return you could get by buying an index fund.

Since Hebei Sailhero Environmental Protection High-techLtd has shed CN¥526m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Because Hebei Sailhero Environmental Protection High-techLtd made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last five years Hebei Sailhero Environmental Protection High-techLtd saw its revenue shrink by 8.6% per year. That puts it in an unattractive cohort, to put it mildly. On the face of it we'd posit the share price fall of 5% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. It is possible for businesses to bounce back but as Buffett says, 'turnarounds seldom turn'.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Hebei Sailhero Environmental Protection High-techLtd's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Hebei Sailhero Environmental Protection High-techLtd's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Hebei Sailhero Environmental Protection High-techLtd's TSR of was a loss of 25% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

While the broader market gained around 11% in the last year, Hebei Sailhero Environmental Protection High-techLtd shareholders lost 17%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. 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. 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. Take risks, for example - Hebei Sailhero Environmental Protection High-techLtd has 1 warning sign we think you should be aware of.

We will like Hebei Sailhero Environmental Protection High-techLtd 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 Chinese exchanges.

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