OSL Group Limited (HKG:863) shareholders have seen the share price descend 15% over the month. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 40% during that period.

Although OSL Group has shed HK$564m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for OSL Group

Because OSL Group 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

OSL Group actually saw its revenue drop by 16% per year over three years. The revenue growth might be lacking but the share price has gained 12% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

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

We consider it positive that insiders have made significant purchases in the last year. 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 OSL Group's earnings, revenue and cash flow.

A Different Perspective

OSL Group shareholders are up 6.5% for the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 5% per year over five year. It is possible that returns will improve along with the business fundamentals. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for OSL Group you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

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