As an investor, mistakes are inevitable. But you don’t want to incur any really big losses. So take a moment to sympathize with long term shareholders of Guangzhou Shiyuan Electronic Technology Company Limited (SZSE:002841), who have seen their share price plummet 74% in three years. That’s enough to make even the most mentally strong person uneasy. And with the share price down 54% in the last year, not many shareholders are going to be happy.
After a 5.0% drop last week, it’s worth examining the company’s fundamentals to see what we can infer from past performance.
Check out our latest analysis for Guangzhou Shiyuan Electronics Technology
To quote Buffett, “Ships will sail around the world, but the Flat Earth Society will thrive. There will continue to be a wide disconnect between price and value in the marketplace…” One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the three years that the stock price declined, Guangzhou Shiyuan Electronics Technology’s earnings per share (EPS) declined 15% annually. This EPS decline was slower than the 36% annual decline in the stock price. Therefore, it is likely that the decline in EPS disappointed the market and caused investors to hesitate to buy.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
SZSE:002841 Earnings Per Share Growth July 28, 2024
It’s worth noting that the CEO pay is lower than the average for companies of a similar size. While CEO pay is always worth keeping an eye on, the more important question is whether the company will be able to grow earnings over the next few years. It might be well worth taking a look at our free report on Guangzhou Shiyuan Electronic Technology’s earnings, revenue and cash flow.
A different perspective
While the broader market fell about 19% over the twelve months, Guangzhou Shiyuan Electronic Technology shareholders did worse, suffering a loss of 52% (even including dividends). However, this could simply be that the share price was affected by the broader market turmoil. It may be worth keeping an eye on the fundamentals in case there are better opportunities. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the 10% annual loss over the past five years. We know that Baron Rothschild said that investors should ‘buy when the blood is flowing’, but we caution that investors should first ensure they are buying a high-quality business. It is always interesting to track the long term performance of a share price. However, to better understand Guangzhou Shiyuan Electronic Technology, there are many other factors to consider. Consider, for example, the ever-present threat of investment risk. We’ve discovered that Guangzhou Shiyuan Electronic Technology has 2 warning signs . Understanding these should be part of your investment process.
If you’re like me, then you won’t want to miss this free list of undervalued small stocks 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 China exchanges.
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This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
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