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Origin Agritech Limited (NASDAQ:SEED) shareholders should be happy to see the share price up 19% in the last month. But only the myopic could ignore the astounding decline over three years. Indeed, the share price is down a whopping 74% in the last three years. So we're relieved for long term holders to see a bit of uplift. Only time will tell if the company can sustain the turnaround.
Given that Origin Agritech 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.
Over the last three years, Origin Agritech's revenue dropped 74% per year. That means its revenue trend is very weak compared to other loss making companies. The swift share price decline at an annual compound rate of 36%, reflects this weak fundamental performance. We prefer leave it to clowns to try to catch falling knives, like this stock. It's worth remembering that investors call buying a steeply falling share price 'catching a falling knife' because it is a dangerous pass time.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Origin Agritech stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Origin Agritech shareholders gained a total return of 3.2% during the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 22% per year, over five years. So this might be a sign the business has turned its fortunes around. You could get a better understanding of Origin Agritech's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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If you spot an error that warrants correction, please contact the editor at email@example.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.