The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Allied Sustainability and Environmental Consultants Group Limited (HKG:8320) have tasted that bitter downside in the last year, as the share price dropped 14%. That's well bellow the market return of -3.6%. Allied Sustainability and Environmental Consultants Group hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. It's down 21% in about a quarter.
Because Allied Sustainability and Environmental Consultants Group is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Allied Sustainability and Environmental Consultants Group's revenue didn't grow at all in the last year. In fact, it fell 28%. That looks pretty grim, at a glance. Shareholders have seen the share price drop 14% in that time. That seems pretty reasonable given the lack of both profits and revenue growth. It's hard to escape the conclusion that buyers must envision either growth down the track, cost cutting, or both.
Depicted in the graphic below, you'll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
Take a more thorough look at Allied Sustainability and Environmental Consultants Group's financial health with this free report on its balance sheet.
A Different Perspective
We doubt Allied Sustainability and Environmental Consultants Group shareholders are happy with the loss of 14% over twelve months. That falls short of the market, which lost 3.6%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. Notably, the loss over the last year isn't as bad as the 21% drop in the last three months. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. Before spending more time on Allied Sustainability and Environmental Consultants Group it might be wise to click here to see if insiders have been buying or selling shares.
Of course Allied Sustainability and Environmental Consultants Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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