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The main aim of stock picking is to find the market-beating stocks. But in any portfolio, there will be mixed results between individual stocks. At this point some shareholders may be questioning their investment in Hao Tian Development Group Limited (HKG:474), since the last five years saw the share price fall 44%. It's down 3.5% in the last seven days.
View our latest analysis for Hao Tian Development Group
Given that Hao Tian Development Group 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last half decade, Hao Tian Development Group saw its revenue increase by 53% per year. That's well above most other pre-profit companies. The share price drop of 11% per year over five years would be considered let down. You could say that the market has been harsh, given the top line growth. If that's the case, now might be the smart time to take a close look at it.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of Hao Tian Development Group's earnings, revenue and cash flow.
A Different Perspective
While the broader market lost about 7.2% in the twelve months, Hao Tian Development Group shareholders did even worse, losing 15%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 11% per year over five years. 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. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).