Generally speaking long term investing is the way to go. But unfortunately, some companies simply don't succeed. For example, after five long years the Termbray Industries International (Holdings) Limited (HKG:93) share price is a whole 59% lower. That's an unpleasant experience for long term holders.
Given that Termbray Industries International (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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over five years, Termbray Industries International (Holdings) grew its revenue at 8.4% per year. That's a fairly respectable growth rate. The share price, meanwhile, has fallen 16% compounded, over five years. That suggests the market is disappointed with the current growth rate. A pessimistic market can create opportunities.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized 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. Dive deeper into the earnings by checking this interactive graph of Termbray Industries International (Holdings)'s earnings, revenue and cash flow.
What about the Total Shareholder Return (TSR)?
We'd be remiss not to mention the difference between Termbray Industries International (Holdings)'s total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Termbray Industries International (Holdings)'s TSR, which was a 53% drop over the last 5 years, was not as bad as the share price return.
A Different Perspective
Investors in Termbray Industries International (Holdings) had a tough year, with a total loss of 18%, against a market gain of about 2.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 14% over the last half decade. We realise that Buffett 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 businesses. You could get a better understanding of Termbray Industries International (Holdings)'s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
But note: Termbray Industries International (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 firstname.lastname@example.org. 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.