Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the Shanxi Zhendong Pharmaceutical Co.,Ltd (SZSE:300158) share price is down 26% in the last year. That falls noticeably short of the market decline of around 13%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 15% in three years. But it's up 9.5% in the last week.
The recent uptick of 9.5% could be a positive sign of things to come, so let's take a look at historical fundamentals.
Because Shanxi Zhendong PharmaceuticalLtd 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. When a company doesn't make profits, we'd generally hope to see good 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.
Shanxi Zhendong PharmaceuticalLtd's revenue didn't grow at all in the last year. In fact, it fell 8.8%. That looks pretty grim, at a glance. The stock price has languished lately, falling 26% in a year. That seems pretty reasonable given the lack of both profits and revenue growth. We think most holders must believe revenue growth will improve, or else costs will decline.
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 Shanxi Zhendong PharmaceuticalLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We regret to report that Shanxi Zhendong PharmaceuticalLtd shareholders are down 26% for the year. Unfortunately, that's worse than the broader market decline of 13%. 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. On the bright side, long term shareholders have made money, with a gain of 3% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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.