The past three years for GHL Systems Berhad (KLSE:GHLSYS) investors has not been profitable

The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term GHL Systems Berhad (KLSE:GHLSYS) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 60% in that time.

So let's have a look and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for GHL Systems Berhad

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the unfortunate three years of share price decline, GHL Systems Berhad actually saw its earnings per share (EPS) improve by 27% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.

Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We note that, in three years, revenue has actually grown at a 9.3% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating GHL Systems Berhad further; while we may be missing something on this analysis, there might also be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We know that GHL Systems Berhad has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling GHL Systems Berhad stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's good to see that GHL Systems Berhad has rewarded shareholders with a total shareholder return of 11% in the last twelve months. That's including the dividend. Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand GHL Systems Berhad better, we need to consider many other factors. Even so, be aware that GHL Systems Berhad is showing 1 warning sign in our investment analysis , you should know about...

Of course GHL Systems Berhad 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 Malaysian 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.