Investors one-year losses continue as Ourpalm (SZSE:300315) dips a further 4.1% this week, earnings continue to decline

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. Unfortunately the Ourpalm Co., Ltd. (SZSE:300315) share price slid 29% over twelve months. That's well below the market decline of 19%. The silver lining (for longer term investors) is that the stock is still 1.0% higher than it was three years ago. The falls have accelerated recently, with the share price down 18% in the last three months.

After losing 4.1% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Ourpalm

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 Ourpalm reported an EPS drop of 4.5% for the last year. This reduction in EPS is not as bad as the 29% 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 65.48, the market remains optimistic.

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

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

A Different Perspective

While the broader market lost about 19% in the twelve months, Ourpalm shareholders did even worse, losing 29%. 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. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Ourpalm better, we need to consider many other factors. For instance, we've identified 1 warning sign for Ourpalm that you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.

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