Hunan TV & Broadcast Intermediary (SZSE:000917) sheds CN¥539m, company earnings and investor returns have been trending downwards for past year

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Hunan TV & Broadcast Intermediary Co., Ltd. (SZSE:000917) shareholders over the last year, as the share price declined 34%. That's well below the market decline of 14%. At least the damage isn't so bad if you look at the last three years, since the stock is down 2.6% in that time. The falls have accelerated recently, with the share price down 25% in the last three months.

If the past week is anything to go by, investor sentiment for Hunan TV & Broadcast Intermediary isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Hunan TV & Broadcast Intermediary

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

Unfortunately Hunan TV & Broadcast Intermediary reported an EPS drop of 20% for the last year. The share price decline of 34% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.

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

We know that Hunan TV & Broadcast Intermediary has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Hunan TV & Broadcast Intermediary's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 14% in the twelve months, Hunan TV & Broadcast Intermediary shareholders did even worse, losing 34% (even including dividends). 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 6% 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. Is Hunan TV & Broadcast Intermediary cheap compared to other companies? These 3 valuation measures might help you decide.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com