Even the best stock pickers will make plenty of bad investments. And there’s no doubt that Twintek Investment Holdings Limited (HKG:6182) stock has had a really bad year. To wit the share price is down 55% in that time. Twintek Investment Holdings may have better days ahead, of course; we’ve only looked at a one year period. Furthermore, it’s down 32% in about a quarter. That’s not much fun for holders. But this could be related to the weak market, which is down 18% in the same period.
View our latest analysis for Twintek Investment Holdings
Given that Twintek Investment 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. Shareholders of unprofitable companies usually expect strong revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Twintek Investment Holdings’s revenue didn’t grow at all in the last year. In fact, it fell 39%. That looks pretty grim, at a glance. In the absence of profits, it’s not unreasonable that the share price fell 55%. Fingers crossed this is the low ebb for the stock. We have a natural aversion to companies that are losing money and shrinking revenue. But perhaps that is being too careful.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
SEHK:6182 Income Statement, March 24th 2020
This free interactive report on Twintek Investment Holdings’s balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Twintek Investment Holdings shareholders are down 55% for the year, even worse than the market loss of 21%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 32%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. 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. Like risks, for instance. Every company has them, and we’ve spotted 4 warning signs for Twintek Investment Holdings (of which 1 is a bit concerning!) you should know about.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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