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We're definitely into long term investing, but some companies are simply bad investments over any time frame. We really hate to see fellow investors lose their hard-earned money. Imagine if you held Stelux Holdings International Limited (HKG:84) for half a decade as the share price tanked 92%. And we doubt long term believers are the only worried holders, since the stock price has declined 64% over the last twelve months. Furthermore, it's down 38% in about a quarter. That's not much fun for holders.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
Check out our latest analysis for Stelux Holdings International
Given that Stelux Holdings International didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over half a decade Stelux Holdings International reduced its trailing twelve month revenue by 21% for each year. That puts it in an unattractive cohort, to put it mildly. So it's not that strange that the share price dropped 40% per year in that period. We don't think this is a particularly promising picture. Ironically, that behavior could create an opportunity for the contrarian investor - but only if there are good reasons to predict a brighter future.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
Take a more thorough look at Stelux Holdings International's financial health with this free report on its balance sheet.
What about the Total Shareholder Return (TSR)?
We've already covered Stelux Holdings International's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Its history of dividend payouts mean that Stelux Holdings International's TSR, which was a 89% drop over the last 5 years, was not as bad as the share price return.
A Different Perspective
We regret to report that Stelux Holdings International shareholders are down 64% for the year. Unfortunately, that's worse than the broader market decline of 16%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 36% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.