The truth is that if you invest for long enough, you're going to end up with some losing stocks. Long term Chengdu Guibao Science & Technology Co.,Ltd. (SZSE:300019) shareholders know that all too well, since the share price is down considerably over three years. So they might be feeling emotional about the 65% share price collapse, in that time. The more recent news is of little comfort, with the share price down 34% in a year. Furthermore, it's down 22% in about a quarter. That's not much fun for holders. But this could be related to the weak market, which is down 13% in the same period.
With the stock having lost 8.9% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
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.
Although the share price is down over three years, Chengdu Guibao Science & TechnologyLtd actually managed to grow EPS by 5.6% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.
It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.
Revenue is actually up 7.3% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Chengdu Guibao Science & TechnologyLtd further; while we may be missing something on this analysis, there might also be an opportunity.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We know that Chengdu Guibao Science & TechnologyLtd has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Chengdu Guibao Science & TechnologyLtd
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of Chengdu Guibao Science & TechnologyLtd, it has a TSR of -63% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!
A Different Perspective
While the broader market lost about 17% in the twelve months, Chengdu Guibao Science & TechnologyLtd shareholders did even worse, losing 33% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 9%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Chengdu Guibao Science & TechnologyLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Chengdu Guibao Science & TechnologyLtd that you should be aware of.
We will like Chengdu Guibao Science & TechnologyLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.
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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.