It is doubtless a positive to see that the Angang Steel Company Limited (HKG:347) share price has gained some 46% in the last three months. But over the last three years we've seen a quite serious decline. Indeed, the share price is down a tragic 57% in the last three years. So the improvement may be a real relief to some. Perhaps the company has turned over a new leaf.
While the stock has risen 11% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.
Because Angang Steel 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 desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last three years Angang Steel saw its revenue shrink by 9.5% per year. That's not what investors generally want to see. The share price decline of 16% compound, over three years, is understandable given the company doesn't have profits to boast of, and revenue is moving in the wrong direction. Of course, it's the future that will determine whether today's price is a good one. We don't generally like to own companies that lose money and can't grow revenues. But any company is worth looking at when it makes a maiden profit.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
