Yahoo Finance Did You Manage To Avoid Hanwei Energy Services's (TSE:HE) Devastating 93% Share Price Drop?
Long term investing works well, but it doesn't always work for each individual stock. We really hate to see fellow investors lose their hard-earned money. Imagine if you held Hanwei Energy Services Corp. (TSE:HE) for half a decade as the share price tanked 93%. We also note that the stock has performed poorly over the last year, with the share price down 40%. It's down 25% in the last seven days.
We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.
See our latest analysis for Hanwei Energy Services
Hanwei Energy Services isn't a profitable company, so 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last five years Hanwei Energy Services saw its revenue shrink by 14% per year. That puts it in an unattractive cohort, to put it mildly. So it's not altogether surprising to see the share price down 41% per year in the same time period. This kind of price performance makes us very wary, especially when combined with falling revenue. Of course, the poor performance could mean the market has been too severe selling down. That can happen.
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 Hanwei Energy Services stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market gained around 3.3% in the last year, Hanwei Energy Services shareholders lost 40%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. However, the loss over the last year isn't as bad as the 41% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. Before spending more time on Hanwei Energy Services it might be wise to click here to see if insiders have been buying or selling shares.
We will like Hanwei Energy Services 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 CA exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
