Shenzhen Kingkey Smart Agriculture TimesLtd's (SZSE:000048 one-year decrease in earnings delivers investors with a 18% loss

Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Shenzhen Kingkey Smart Agriculture Times Co.,Ltd (SZSE:000048) have tasted that bitter downside in the last year, as the share price dropped 18%. That's well below the market decline of 13%. Zooming out, the stock is down 18% in the last three years.

With the stock having lost 6.6% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for Shenzhen Kingkey Smart Agriculture TimesLtd

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...' 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, Shenzhen Kingkey Smart Agriculture TimesLtd had to report a 73% decline in EPS over the last year. This fall in the EPS is significantly worse than the 18% the share price fall. It may have been that the weak EPS was not as bad as some had feared.

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

This free interactive report on Shenzhen Kingkey Smart Agriculture TimesLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 13% in the twelve months, Shenzhen Kingkey Smart Agriculture TimesLtd shareholders did even worse, losing 18%. 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. Longer term investors wouldn't be so upset, since they would have made 6%, each year, over five years. 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. 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. Case in point: We've spotted 3 warning signs for Shenzhen Kingkey Smart Agriculture TimesLtd you should be aware of, and 2 of them are potentially serious.

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.