We think intelligent long term investing is the way to go. But along the way some stocks are going to perform badly. To wit, the LingNan Eco&Culture-Tourism Co.,Ltd. (SZSE:002717) share price managed to fall 55% over five long years. That is extremely sub-optimal, to say the least. More recently, the share price has dropped a further 11% in a month.

Since LingNan Eco&Culture-TourismLtd has shed CN¥487m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for LingNan Eco&Culture-TourismLtd

Because LingNan Eco&Culture-TourismLtd 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. 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.

Over half a decade LingNan Eco&Culture-TourismLtd reduced its trailing twelve month revenue by 21% for each year. That puts it in an unattractive cohort, to put it mildly. Arguably, the market has responded appropriately to this business performance by sending the share price down 9% (annualized) in the same time period. We don't generally like to own companies that lose money and don't grow revenues. You might be better off spending your money on a leisure activity. You'd want to research this company pretty thoroughly before buying, it looks a bit too risky for us.

You can see below how earnings and revenue have changed over time (discover 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

It's nice to see that LingNan Eco&Culture-TourismLtd shareholders have received a total shareholder return of 8.6% over the last year. There's no doubt those recent returns are much better than the TSR loss of 9% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for LingNan Eco&Culture-TourismLtd that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.