This month, we saw the Hunan Jingfeng Pharmaceutical Co.,Ltd. (SZSE:000908) up an impressive 84%. But if you look at the last five years the returns have not been good. You would have done a lot better buying an index fund, since the stock has dropped 49% in that half decade.

The recent uptick of 19% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Hunan Jingfeng PharmaceuticalLtd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over half a decade Hunan Jingfeng PharmaceuticalLtd reduced its trailing twelve month revenue by 30% for each year. That's definitely a weaker result than most pre-profit companies report. It seems pretty reasonable to us that the share price dipped 8% per year in that time. This loss means the stock shareholders are probably pretty annoyed. It is possible for businesses to bounce back but as Buffett says, 'turnarounds seldom turn'.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

If you are thinking of buying or selling Hunan Jingfeng PharmaceuticalLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Hunan Jingfeng PharmaceuticalLtd shareholders are down 11% over twelve months, which isn't far from the market return of -11%. However, the loss over the last year isn't as bad as the 8% per annum loss investors have suffered over the last half decade. Generally speaking we'd prefer see an improvement in the fundamental metrics before becoming enthusiastic about the stock. 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. Take risks, for example - Hunan Jingfeng PharmaceuticalLtd has 2 warning signs we think you should be aware of.

We will like Hunan Jingfeng PharmaceuticalLtd better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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.