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We're definitely into long term investing, but some companies are simply bad investments over any time frame. We don't wish catastrophic capital loss on anyone. Spare a thought for those who held Greentech Technology International Limited (HKG:195) for five whole years - as the share price tanked 83%. And it's not just long term holders hurting, because the stock is down 43% in the last year. Even worse, it's down 14% in about a month, which isn't fun at all. We do note, however, that the broader market is down 7.7% in that period, and this may have weighed on the share price.
While a drop like that is definitely a body blow, money isn't as important as health and happiness.
See our latest analysis for Greentech Technology International
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Greentech Technology International became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics may better explain the share price move.
In contrast to the share price, revenue has actually increased by 0.2% a year in the five year period. So it seems one might have to take closer look at the fundamentals to understand why the share price languishes. After all, there may be an opportunity.
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 Greentech Technology International's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market lost about 11% in the twelve months, Greentech Technology International shareholders did even worse, losing 43%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 30% per year over five years. 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. Before deciding if you like the current share price, check how Greentech Technology International scores on these 3 valuation metrics.