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While not a mind-blowing move, it is good to see that the Tiande Chemical Holdings Limited (HKG:609) share price has gained 21% in the last three months. But the last three years have seen a terrible decline. The share price has sunk like a leaky ship, down 73% in that time. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround.
View our latest analysis for Tiande Chemical Holdings
Tiande Chemical Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last three years, Tiande Chemical Holdings's revenue dropped 0.08% per year. That is not a good result. The share price fall of 35% (per year, over three years) is a stern reminder that money-losing companies are expected to grow revenue. This business clearly needs to grow revenues if it is to perform as investors hope. Don't let a share price decline ruin your calm. You make better decisions when you're calm.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
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 Dividend Lost
It's important to keep in mind that we've been talking about the share price returns, which don't include dividends, while the total shareholder return does. Many would argue the TSR gives a more complete picture of the value a stock brings to its holders. Over the last 3 years, Tiande Chemical Holdings generated a TSR of -71%, which is, of course, better than the share price return. Even though the company isn't paying dividends at the moment, it has done in the past.
A Different Perspective
We regret to report that Tiande Chemical Holdings shareholders are down 25% for the year. Unfortunately, that's worse than the broader market decline of 5.3%. 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 16% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.