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Even the best investor on earth makes unsuccessful investments. But it should be a priority to avoid stomach churning catastrophes, wherever possible. So we hope that those who held Great Water Holdings Limited (HKG:8196) during the last year don't lose the lesson, in addition to the 76% hit to the value of their shares. That'd be enough to make even the strongest stomachs churn. We note that it has not been easy for shareholders over three years, either; the share price is down 60% in that time. On top of that, the share price has dropped a further 32% in a month. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.
Check out our latest analysis for Great Water Holdings
Great Water Holdings 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. 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.
Great Water Holdings's revenue didn't grow at all in the last year. In fact, it fell 44%. That looks pretty grim, at a glance. The market obviously agrees, since the share price tanked 76%. That's a stern reminder that profitless companies need to grow the top line, at the very least. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.
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.
Balance sheet strength is crucual. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
A Different Perspective
Great Water Holdings shareholders are down 76% for the year, falling short of the market return. Meanwhile, the broader market slid about 17%, likely weighing on the stock. Shareholders have lost 26% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Warren Buffett famously said he likes to 'buy when there is blood on the streets', he also focusses on high quality stocks with solid prospects. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.