Some stocks are best avoided. We really hate to see fellow investors lose their hard-earned money. Anyone who held AVIC Joy Holdings (HK) Limited (HKG:260) for five years would be nursing their metaphorical wounds since the share price dropped 95% in that time. And it's not just long term holders hurting, because the stock is down 47% in the last year. On top of that, the share price is down 13% in the last week.

We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

See our latest analysis for AVIC Joy Holdings (HK)

Because AVIC Joy Holdings (HK) 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last five years AVIC Joy Holdings (HK) saw its revenue shrink by 58% per year. That's definitely a weaker result than most pre-profit companies report. So it's not that strange that the share price dropped 44% 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.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We regret to report that AVIC Joy Holdings (HK) shareholders are down 47% for the year. Unfortunately, that's worse than the broader market decline of 13%. 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 44% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand AVIC Joy Holdings (HK) better, we need to consider many other factors. For instance, we've identified 5 warning signs for AVIC Joy Holdings (HK) (2 shouldn't be ignored) that you should be aware of.

Of course AVIC Joy Holdings (HK) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

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.

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. Thank you for reading.