Long term investing works well, but it doesn’t always work for each individual stock. It hits us in the gut when we see fellow investors suffer a loss. Spare a thought for those who held Global Link Communications Holdings Limited (HKG:8060) for five whole years – as the share price tanked 86%. We also note that the stock has performed poorly over the last year, with the share price down 54%. Furthermore, it’s down 30% in about a quarter. That’s not much fun for holders.
While a drop like that is definitely a body blow, money isn’t as important as health and happiness.
View our latest analysis for Global Link Communications Holdings
Given that Global Link Communications 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over five years, Global Link Communications Holdings grew its revenue at 9.6% per year. That’s a fairly respectable growth rate. So the stock price fall of 33% per year seems pretty steep. The truth is that the growth might be below expectations, and investors are probably worried about the continual losses.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
SEHK:8060 Income Statement, March 17th 2020
Take a more thorough look at Global Link Communications Holdings’s financial health with this free report on its balance sheet.
A Different Perspective
We regret to report that Global Link Communications Holdings shareholders are down 54% for the year. Unfortunately, that’s worse than the broader market decline of 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 33% per year over five years. We realise that Baron Rothschild 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 business. 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. To that end, you should be aware of the 4 warning signs we’ve spotted with Global Link Communications Holdings .
We will like Global Link Communications Holdings better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.