For many, the main point of investing is to generate higher returns than the overall market. But even the best stock picker will only win with some selections. So we wouldn't blame long term Nanjing Red Sun Co.,Ltd. (SZSE:000525) shareholders for doubting their decision to hold, with the stock down 38% over a half decade. And some of the more recent buyers are probably worried, too, with the stock falling 22% in the last year. On the other hand the share price has bounced 8.1% over the last week.

While the last five years has been tough for Nanjing Red SunLtd shareholders, this past week has shown signs of promise. So let's look at the longer term fundamentals and see if they've been the driver of the negative returns.

View our latest analysis for Nanjing Red SunLtd

Nanjing Red SunLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect 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 five years Nanjing Red SunLtd saw its revenue shrink by 0.4% per year. That's not what investors generally want to see. The stock hasn't done well for shareholders in the last five years, falling 7%, annualized. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. Without profits, its hard to see how shareholders win if the revenue keeps falling.

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

If you are thinking of buying or selling Nanjing Red SunLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that Nanjing Red SunLtd shareholders are down 22% for the year. Unfortunately, that's worse than the broader market decline of 6.8%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% 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. It's always interesting to track share price performance over the longer term. But to understand Nanjing Red SunLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Nanjing Red SunLtd that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.