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If You Had Bought Rici Healthcare Holdings (HKG:1526) Stock A Year Ago, You'd Be Sitting On A 44% Loss, Today

It's easy to match the overall market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Rici Healthcare Holdings Limited (HKG:1526) shareholders over the last year, as the share price declined 44%. That's disappointing when you consider the market returned -14%. Rici Healthcare Holdings may have better days ahead, of course; we've only looked at a one year period. The falls have accelerated recently, with the share price down 25% in the last three months.

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Check out our latest analysis for Rici Healthcare Holdings

Given that Rici Healthcare 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Rici Healthcare Holdings saw its revenue grow by 27%. That's definitely a respectable growth rate. Meanwhile, the share price is down 44% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

SEHK:1526 Income Statement, May 27th 2019
SEHK:1526 Income Statement, May 27th 2019

If you are thinking of buying or selling Rici Healthcare Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Rici Healthcare Holdings shareholders are down 44% for the year, even worse than the market loss of 14%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 25%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

But note: Rici Healthcare Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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.

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. Thank you for reading.

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