If You Had Bought Kingfa Science & Technology (India)'s (NSE:KINGFA) Shares Three Years Ago You Would Be Down 34%

While it may not be enough for some shareholders, we think it is good to see the Kingfa Science & Technology (India) Limited (NSE:KINGFA) share price up 20% in a single quarter. But that doesn't help the fact that the three year return is less impressive. Truth be told the share price declined 34% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

See our latest analysis for Kingfa Science & Technology (India)

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the three years that the share price fell, Kingfa Science & Technology (India)'s earnings per share (EPS) dropped by 4.7% each year. This reduction in EPS is slower than the 13% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

This free interactive report on Kingfa Science & Technology (India)'s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Over the last year, Kingfa Science & Technology (India) shareholders took a loss of 21%. In contrast the market gained about 11%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. The three-year loss of 10% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 3 warning signs for Kingfa Science & Technology (India) that you should be aware of before investing here.

We will like Kingfa Science & Technology (India) better if we see some big insider buys. While we wait, check out this free list of growing companies 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 IN exchanges.

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This article by Simply Wall St is general in nature. 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.
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