Easy Come, Easy Go: How Solargiga Energy Holdings (HKG:757) Shareholders Got Unlucky And Saw 73% Of Their Cash Evaporate

Simply Wall St

Long term investing is the way to go, but that doesn't mean you should hold every stock forever. It hits us in the gut when we see fellow investors suffer a loss. Anyone who held Solargiga Energy Holdings Limited (HKG:757) for five years would be nursing their metaphorical wounds since the share price dropped 73% in that time. And some of the more recent buyers are probably worried, too, with the stock falling 42% in the last year. Furthermore, it's down 39% in about a quarter. That's not much fun for holders.

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See our latest analysis for Solargiga Energy Holdings

Given that Solargiga Energy Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, Solargiga Energy Holdings grew its revenue at 10% per year. That's a fairly respectable growth rate. So it is unexpected to see the stock down 23% per year in the last five years. The market can be a harsh master when your company is losing money and revenue growth disappoints.

The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.

SEHK:757 Income Statement, May 24th 2019

If you are thinking of buying or selling Solargiga Energy Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 13% in the twelve months, Solargiga Energy Holdings shareholders did even worse, losing 42%. 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 23% 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. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.