Every investor on earth makes bad calls sometimes. But really big losses can really drag down an overall portfolio. So consider, for a moment, the misfortune of Royal Catering Group Holdings Company Limited (HKG:8300) investors who have held the stock for three years as it declined a whopping 95%. That would be a disturbing experience. And over the last year the share price fell 33%, so we doubt many shareholders are delighted. Unhappily, the share price slid 5.1% 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 Royal Catering Group Holdings

Given that Royal Catering Group Holdings 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years, Royal Catering Group Holdings's revenue dropped 4.7% per year. That is not a good result. Having said that the 63% annualized share price decline highlights the risk of investing in unprofitable companies. We're generally averse to companies with declining revenues, but we're not alone in that. There's no more than a snowball's chance in hell that share price will head back to its old highs, in the short term.

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

If you are thinking of buying or selling Royal Catering Group Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

The last twelve months weren't great for Royal Catering Group Holdings shares, which performed worse than the market, costing holders 33%. The market shed around 7.7%, no doubt weighing on the stock price. Unfortunately, the longer term story isn't pretty, with investment losses running at 63% per year over three years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. You could get a better understanding of Royal Catering Group Holdings's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

We will like Royal Catering Group Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.