As every investor would know, you don't hit a homerun every time you swing.But it should be a priority to avoid stomach churning catastrophes, wherever possible.So spare a thought for the long term shareholders of Alibaba Health Information Technology Limited (HKG:241); the share price is down a whopping 74% in the last twelve months.That'd be a striking reminder about the importance of diversification. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 13% in three years.Furthermore, it's down 48% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
See our latest analysis for Alibaba Health Information Technology
Because Alibaba Health Information Technology 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 fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Alibaba Health Information Technology saw its revenue grow by 40%.That's definitely a respectable growth rate.However, it seems like the market wanted more, since the share price is down 74%.It could be that the losses are too much for investors to handle without losing their nerve.We'd posit that the future looks challenging, given the disconnect between revenue growth and the share price.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's good to see that there was some significant insider buying in the last three months. That's a positive.On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business.So we recommend checking out this free report showing consensus forecasts
A Different Perspective
While the broader market lost about 9.9% in the twelve months, Alibaba Health Information Technology shareholders did even worse, losing 74%.However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity.Longer term investors wouldn't be so upset, since they would have made 9%, each year, over five years.If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering.I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too.For instance, we've identified2 warning signs for Alibaba Health Information Technologythat you should be aware of.
Alibaba Health Information Technology is not the only stock insiders are buying. So take a peek at this free list of growing companies with 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.
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.
