Shareholders in Hoshine Silicon Industry (SHSE:603260) are in the red if they invested three years ago

Investing in stocks inevitably means buying into some companies that perform poorly. Long term Hoshine Silicon Industry Co., Ltd. (SHSE:603260) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 68% decline in the share price in that time. And over the last year the share price fell 25%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 10% in the last three months. But this could be related to the weak market, which is down 13% in the same 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 Hoshine Silicon Industry

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the three years that the share price fell, Hoshine Silicon Industry's earnings per share (EPS) dropped by 5.9% each year. The share price decline of 32% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

This free interactive report on Hoshine Silicon Industry's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We regret to report that Hoshine Silicon Industry shareholders are down 25% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 17%. 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. On the bright side, long term shareholders have made money, with a gain of 10% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Case in point: We've spotted 4 warning signs for Hoshine Silicon Industry you should be aware of, and 2 of them shouldn't be ignored.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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.