Investors are selling off Pak Tak International (HKG:2668), lack of profits no doubt contribute to shareholders one-year loss

The nature of investing is that you win some, and you lose some. And unfortunately for Pak Tak International Limited (HKG:2668) shareholders, the stock is a lot lower today than it was a year ago. The share price is down a hefty 52% in that time. However, the longer term returns haven't been so bad, with the stock down 3.9% in the last three years. Furthermore, it's down 21% in about a quarter. That's not much fun for holders.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Pak Tak International wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Pak Tak International saw its revenue grow by 2.4%. That's not a very high growth rate considering it doesn't make profits. It's likely this muted growth has contributed to the share price decline of 52% in the last year. Like many holders, we really want to see better revenue growth in companies that lose money. Of course, the market can be too impatient at times. Why not take a closer look at this one so you're ready to pounce if growth does accelerate.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

While the broader market gained around 39% in the last year, Pak Tak International shareholders lost 52%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. For example, we've discovered 3 warning signs for Pak Tak International (1 doesn't sit too well with us!) that you should be aware of before investing here.

But note: Pak Tak International 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 Hong Kong exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.