Gifore Agricultural Science & Technology ServiceLtd (SZSE:300022 investor three-year losses grow to 29% as the stock sheds CN¥209m this past week

Many investors define successful investing as beating the market average over the long term. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. We regret to report that long term Gifore Agricultural Science & Technology Service Co.,Ltd (SZSE:300022) shareholders have had that experience, with the share price dropping 29% in three years, versus a market decline of about 22%. And over the last year the share price fell 27%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 17% in the last three months.

If the past week is anything to go by, investor sentiment for Gifore Agricultural Science & Technology ServiceLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

View our latest analysis for Gifore Agricultural Science & Technology ServiceLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Gifore Agricultural Science & Technology ServiceLtd moved from a loss to profitability. We would usually expect to see the share price rise as a result. So it's worth looking at other metrics to try to understand the share price move.

We note that, in three years, revenue has actually grown at a 4.7% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating Gifore Agricultural Science & Technology ServiceLtd further; while we may be missing something on this analysis, there might also be an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While the broader market lost about 10% in the twelve months, Gifore Agricultural Science & Technology ServiceLtd shareholders did even worse, losing 27%. 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 4% 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. Before deciding if you like the current share price, check how Gifore Agricultural Science & Technology ServiceLtd scores on these 3 valuation metrics.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.