The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term Shenzhen Wongtee International Enterprise Co., Ltd. (SZSE:000056) shareholders know that all too well, since the share price is down considerably over three years. So they might be feeling emotional about the 68% share price collapse, in that time. And the ride hasn't got any smoother in recent times over the last year, with the price 27% lower in that time. More recently, the share price has dropped a further 44% in a month.

With the stock having lost 14% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Shenzhen Wongtee International 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 three years, Shenzhen Wongtee International Enterprise saw its revenue grow by 11% per year, compound. That's a pretty good rate of top-line growth. So some shareholders would be frustrated with the compound loss of 19% per year. To be frank we're surprised to see revenue growth and share price growth diverge so strongly. It would be well worth taking a closer look at the company, to determine growth trends (and balance sheet strength).

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

This free interactive report on Shenzhen Wongtee International Enterprise's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Shenzhen Wongtee International Enterprise shareholders are down 27% for the year, but the market itself is up 7.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 7% 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. 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. For example, we've discovered 2 warning signs for Shenzhen Wongtee International Enterprise that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.