Longmaster Information & Technology (SZSE:300288) stock falls 10% in past week as one-year earnings and shareholder returns continue downward trend

Investing in stocks comes with the risk that the share price will fall. Unfortunately, shareholders of Longmaster Information & Technology Co., Ltd. (SZSE:300288) have suffered share price declines over the last year. The share price is down a hefty 59% in that time. At least the damage isn't so bad if you look at the last three years, since the stock is down 4.1% in that time. The falls have accelerated recently, with the share price down 25% in the last three months.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

View our latest analysis for Longmaster Information & Technology

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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, Longmaster Information & Technology had to report a 19% decline in EPS over the last year. This reduction in EPS is not as bad as the 59% share price fall. So it seems the market was too confident about the business, a year ago. Of course, with a P/E ratio of 56.00, the market remains optimistic.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Longmaster Information & Technology's key metrics by checking this interactive graph of Longmaster Information & Technology's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Longmaster Information & Technology shareholders are down 59% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 10%. 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 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. 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. Even so, be aware that Longmaster Information & Technology is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.