As an investor, mistakes are inevitable. But really bad investments should be rare. So spare a thought for the long term shareholders of AMCO United Holding Limited (HKG:630); the share price is down a whopping 86% in the last three years. That might cause some serious doubts about the merits of the initial decision to buy the stock, to put it mildly. It’s up 4.5% in the last seven days.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
See our latest analysis for AMCO United Holding
Given that AMCO United Holding 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years, AMCO United Holding saw its revenue grow by 6.3% per year, compound. That’s not a very high growth rate considering it doesn’t make profits. Nonetheless, it’s fair to say the rapidly declining share price (down 48%, compound, over three years) suggests the market is very disappointed with this level of growth. We generally don’t try to ‘catch the falling knife’. Of course, revenue growth is nice but generally speaking the lower the profits, the riskier the business – and this business isn’t making steady profits.
The company’s revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
SEHK:630 Income Statement, March 24th 2020
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on AMCO United Holding’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
While it’s certainly disappointing to see that AMCO United Holding shares lost 5.2% throughout the year, that wasn’t as bad as the market loss of 23%. What is more upsetting is the 26% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. It’s always interesting to track share price performance over the longer term. But to understand AMCO United Holding better, we need to consider many other factors. Even so, be aware that AMCO United Holding is showing 5 warning signs in our investment analysis , and 2 of those don’t sit too well with us…
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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 [email protected]. 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.