Shareholders in CSSC Science& Technology (SHSE:600072) are in the red if they invested a year ago

The nature of investing is that you win some, and you lose some. Anyone who held CSSC Science& Technology Co., Ltd (SHSE:600072) over the last year knows what a loser feels like. In that relatively short period, the share price has plunged 52%. Longer term investors have fared much better, since the share price is up 19% in three years. Shareholders have had an even rougher run lately, with the share price down 18% in the last 90 days. Of course, this share price action may well have been influenced by the 7.1% decline in the broader market, throughout the period.

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.

Check out our latest analysis for CSSC Science& Technology

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Unhappily, CSSC Science& Technology had to report a 56% decline in EPS over the last year. We note that the 52% share price drop is very close to the EPS drop. Given the lower EPS we might have expected investors to lose confidence in the stock, but that doesn't seemed to have happened. Instead, the change in the share price seems to reduction in earnings per share, alone.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on CSSC Science& Technology's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 16% in the twelve months, CSSC Science& Technology shareholders did even worse, losing 52% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 2% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand CSSC Science& Technology better, we need to consider many other factors. For instance, we've identified 4 warning signs for CSSC Science& Technology (3 are concerning) that you should be aware of.

Of course CSSC Science& Technology 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 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com