FESCO Group Co., Ltd. (SHSE:600861) shareholders might be concerned after seeing the share price drop 21% in the last quarter. But that scarcely detracts from the really solid long term returns generated by the company over five years. In fact, the share price is 180% higher today. We think it's more important to dwell on the long term returns than the short term returns. Ultimately business performance will determine whether the stock price continues the positive long term trend.
Since the long term performance has been good but there's been a recent pullback of 4.1%, let's check if the fundamentals match the share price.
Check out our latest analysis for FESCO Group
Given that FESCO Group 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years FESCO Group saw its revenue grow at 35% per year. Even measured against other revenue-focussed companies, that's a good result. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 23% per year, compound, during the period. This suggests the market has well and truly recognized the progress the business has made. To our minds that makes FESCO Group worth investigating - it may have its best days ahead.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Although it hurts that FESCO Group returned a loss of 6.0% in the last twelve months, the broader market was actually worse, returning a loss of 8.4%. Longer term investors wouldn't be so upset, since they would have made 23%, each year, over five years. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand FESCO Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for FESCO Group you should be aware of.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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.