Investors push Best Food Holding (HKG:1488) 10% lower this week, company's increasing losses might be to blame

It hasn't been the best quarter for Best Food Holding Company Limited (HKG:1488) shareholders, since the share price has fallen 26% in that time. But the silver lining is the stock is up over five years. Unfortunately its return of 20% is below the market return of 42%.

Although Best Food Holding has shed HK$142m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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Best Food Holding isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last half decade Best Food Holding's revenue has actually been trending down at about 11% per year. Even though revenue hasn't increased, the stock actually gained 4%, per year, during the same period. It's probably worth checking other factors such as the profitability, to try to understand the share price action. It may not be reflecting the revenue.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Best Food Holding's financial health with this free report on its balance sheet.

A Different Perspective

Best Food Holding provided a TSR of 13% over the last twelve months. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 4% over half a decade This suggests the company might be improving over time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Best Food Holding you should know about.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.