The one-year shareholder returns and company earnings persist lower as Risen EnergyLtd (SZSE:300118) stock falls a further 3.4% in past week

Even the best stock pickers will make plenty of bad investments. And there's no doubt that Risen Energy Co.,Ltd. (SZSE:300118) stock has had a really bad year. To wit the share price is down 54% in that time. Even if you look out three years, the returns are still disappointing, with the share price down47% in that time. The falls have accelerated recently, with the share price down 22% in the last three months. Of course, this share price action may well have been influenced by the 9.2% decline in the broader market, throughout the period.

After losing 3.4% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

Check out our latest analysis for Risen EnergyLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Unfortunately Risen EnergyLtd reported an EPS drop of 38% for the last year. This reduction in EPS is not as bad as the 54% share price fall. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

We regret to report that Risen EnergyLtd shareholders are down 54% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 19%. 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. On the bright side, long term shareholders have made money, with a gain of 1.4% 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. 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. For instance, we've identified 5 warning signs for Risen EnergyLtd (3 are a bit unpleasant) that you should be aware of.

Of course Risen EnergyLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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