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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 Millennium Pacific Group Holdings Limited (HKG:8147) investors who have held the stock for three years as it declined a whopping 95%. That would certainly shake our confidence in the decision to own the stock. And more recent buyers are having a tough time too, with a drop of 92% in the last year. Furthermore, it's down 70% in about a quarter. That's not much fun for holders.

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.

Check out our latest analysis for Millennium Pacific Group Holdings

Given that Millennium Pacific 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 three years, Millennium Pacific Group Holdings grew revenue at 24% per year. That's well above most other pre-profit companies. So on the face of it we're really surprised to see the share price down 62% a year in the same time period. The share price makes us wonder if there is an issue with profitability. Ultimately, revenue growth doesn't amount to much if the business can't scale well. If the company is low on cash, it may have to raise capital soon.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

The last twelve months weren't great for Millennium Pacific Group Holdings shares, which cost holders 92%, while the market was up about 0.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The three-year loss of 62% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.