Did Changing Sentiment Drive Universal Technologies Holdings's (HKG:1026) Share Price Down A Worrying 54%?
We think intelligent long term investing is the way to go. But unfortunately, some companies simply don't succeed. For example, after five long years the Universal Technologies Holdings Limited (HKG:1026) share price is a whole 54% lower. We certainly feel for shareholders who bought near the top. And some of the more recent buyers are probably worried, too, with the stock falling 24% in the last year. Shareholders have had an even rougher run lately, with the share price down 18% in the last 90 days.
See our latest analysis for Universal Technologies Holdings
Universal Technologies Holdings 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 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, Universal Technologies Holdings saw its revenue increase by 2.6% per year. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 14% for the last five years. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Universal Technologies Holdings. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. Dive deeper into the earnings by checking this interactive graph of Universal Technologies Holdings's earnings, revenue and cash flow.
A Different Perspective
Investors in Universal Technologies Holdings had a tough year, with a total loss of 24%, against a market gain of about 2.3%. 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 14% 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. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Universal Technologies Holdings by clicking this link.
Universal Technologies Holdings 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.
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 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. Thank you for reading.
