Juewei Food's (SHSE:603517) earnings have declined over three years, contributing to shareholders 79% loss

As every investor would know, not every swing hits the sweet spot. But you have a problem if you face massive losses more than once in a while. So consider, for a moment, the misfortune of Juewei Food Co., Ltd. (SHSE:603517) investors who have held the stock for three years as it declined a whopping 80%. That would be a disturbing experience. And more recent buyers are having a tough time too, with a drop of 64% in the last year. The falls have accelerated recently, with the share price down 19% in the last three months. Of course, this share price action may well have been influenced by the 8.4% decline in the broader market, throughout the period. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

The recent uptick of 7.6% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Juewei Food

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Juewei Food saw its EPS decline at a compound rate of 25% per year, over the last three years. This reduction in EPS is slower than the 42% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

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

Dive deeper into Juewei Food's key metrics by checking this interactive graph of Juewei Food's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Juewei Food shareholders are down 63% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 19%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 11% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Juewei Food that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.