Statistically speaking, long term investing is a profitable endeavour. But along the way some stocks are going to perform badly. For example the China City Infrastructure Group Limited (HKG:2349) share price dropped 50% over five years. That's not a lot of fun for true believers. We also note that the stock has performed poorly over the last year, with the share price down 36%. On top of that, the share price has dropped a further 24% in a month.

See our latest analysis for China City Infrastructure Group

Because China City Infrastructure Group is loss-making, 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last half decade, China City Infrastructure Group saw its revenue increase by 15% per year. That's a fairly respectable growth rate. The share price return isn't so respectable with an annual loss of 13% over the period. It seems probably that the business has failed to live up to initial expectations. That could lead to an opportunity if the company is going to become profitable sooner rather than later.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on China City Infrastructure Group's earnings, revenue and cash flow 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, China City Infrastructure Group shareholders did even worse, losing 36%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 13% over the last half decade. We realise that Buffett 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 businesses. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of China City Infrastructure Group by clicking this link.