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 FIH Mobile Limited (HKG:2038), since the last five years saw the share price fall 39%. The last week also saw the share price slip down another 6.2%. However, this move may have been influenced by the broader market, which fell 3.5% in that time.

If the past week is anything to go by, investor sentiment for FIH Mobile isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Because FIH Mobile 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over half a decade FIH Mobile reduced its trailing twelve month revenue by 16% for each year. That puts it in an unattractive cohort, to put it mildly. On the face of it we'd posit the share price fall of 7% compound, over five years is well justified by the fundamental deterioration. This loss means the stock shareholders are probably pretty annoyed. Risk averse investors probably wouldn't like this one much.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at FIH Mobile's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that FIH Mobile has rewarded shareholders with a total shareholder return of 12% in the last twelve months. That certainly beats the loss of about 7% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. If you would like to research FIH Mobile in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

But note: FIH Mobile may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong 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.