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As every investor would know, you don't hit a homerun every time you swing. But it's not unreasonable to try to avoid truly shocking capital losses. It must have been painful to be a ECI Technology Holdings Limited (HKG:8013) shareholder over the last year, since the stock price plummeted 73% in that time. 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 57% in that time. Furthermore, it's down 44% in about a quarter. That's not much fun for holders.
Check out our latest analysis for ECI Technology Holdings
While ECI Technology Holdings made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last twelve months, ECI Technology Holdings increased its revenue by 11%. That's not a very high growth rate considering it doesn't make profits. Nonetheless, it's fair to say the 73% share price implosion is unexpected.. We'd venture this growth was too low to give holders confidence that profitability is on the horizon. But if it will make money, albeit later than previously believed, this could be an opportunity.
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 ECI Technology Holdings shares, which performed worse than the market, costing holders 73%. Meanwhile, the broader market slid about 18%, likely weighing on the stock. Shareholders have lost 25% 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 Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that ECI Technology Holdings is showing 4 warning signs in our investment analysis , and 1 of those is potentially serious...