Investors Who Bought China E-Information Technology Group (HKG:8055) Shares Five Years Ago Are Now Down 94%

Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We really hate to see fellow investors lose their hard-earned money. Anyone who held China E-Information Technology Group Limited (HKG:8055) for five years would be nursing their metaphorical wounds since the share price dropped 94% in that time. And it's not just long term holders hurting, because the stock is down 82% in the last year. Shareholders have had an even rougher run lately, with the share price down 62% in the last 90 days. This could be related to the recent financial results - you can catch up on the most recent data by reading our company report.

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.

View our latest analysis for China E-Information Technology Group

Because China E-Information Technology Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last half decade, China E-Information Technology Group saw its revenue increase by 6.4% per year. That's a pretty good rate for a long time period. So the stock price fall of 43% 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 company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on China E-Information Technology Group's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 18% in the twelve months, China E-Information Technology Group shareholders did even worse, losing 82%. 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 43% 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. It's always interesting to track share price performance over the longer term. But to understand China E-Information Technology Group better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for China E-Information Technology Group you should be aware of, and 2 of them are concerning.

We will like China E-Information Technology Group 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.