In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in Shaanxi Broadcast & TV Network Intermediary(Group)Co.,Ltd. (SHSE:600831), since the last five years saw the share price fall 41%. And we doubt long term believers are the only worried holders, since the stock price has declined 33% over the last twelve months. Shareholders have had an even rougher run lately, with the share price down 29% in the last 90 days. But this could be related to the weak market, which is down 17% in the same period.
After losing 18% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.
Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over five years, Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd grew its revenue at 2.2% per year. That's not a very high growth rate considering it doesn't make profits. Given the weak growth, the share price fall of 7% isn't particularly surprising. The key question is whether the company can make it to profitability, and beyond, without trouble. It could be worth putting it on your watchlist and revisiting when it makes its maiden profit.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd'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 Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd shareholders are down 33% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 26%. 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 7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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 instance, we've identified 2 warning signs for Shaanxi Broadcast & TV Network Intermediary(Group)Co.Ltd 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.