Strong week for Daqian Ecology&Environment GroupLtd (SHSE:603955) shareholders doesn't alleviate pain of one-year loss

This week we saw the Daqian Ecology&Environment Group Co.,Ltd. (SHSE:603955) share price climb by 13%. But that doesn't change the fact that the returns over the last year have been less than pleasing. After all, the share price is down 49% in the last year, significantly under-performing the market.

On a more encouraging note the company has added CN¥138m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Check out our latest analysis for Daqian Ecology&Environment GroupLtd

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 last year Daqian Ecology&Environment GroupLtd saw its earnings per share drop below zero. Some investors no doubt dumped the stock as a result. However, there may be an opportunity for investors if the company can recover.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Daqian Ecology&Environment GroupLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 20% in the twelve months, Daqian Ecology&Environment GroupLtd shareholders did even worse, losing 49%. 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 7% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Daqian Ecology&Environment GroupLtd better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Daqian Ecology&Environment GroupLtd you should be aware of, and 1 of them is a bit unpleasant.

Of course Daqian Ecology&Environment GroupLtd 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