Shenzhen Kingdom Sci-Tech (SHSE:600446 investor five-year losses grow to 42% as the stock sheds CN¥449m this past week

Ideally, your overall portfolio should beat the market average. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in Shenzhen Kingdom Sci-Tech Co., Ltd (SHSE:600446), since the last five years saw the share price fall 43%. We also note that the stock has performed poorly over the last year, with the share price down 25%. Shareholders have had an even rougher run lately, with the share price down 18% in the last 90 days.

If the past week is anything to go by, investor sentiment for Shenzhen Kingdom Sci-Tech isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Shenzhen Kingdom Sci-Tech

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Shenzhen Kingdom Sci-Tech became profitable within the last five years. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

We don't think that the 0.6% is big factor in the share price, since it's quite small, as dividends go. Revenue is actually up 7.2% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We know that Shenzhen Kingdom Sci-Tech has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Shenzhen Kingdom Sci-Tech will earn in the future (free profit forecasts).

A Different Perspective

While the broader market lost about 8.9% in the twelve months, Shenzhen Kingdom Sci-Tech shareholders did even worse, losing 25% (even including dividends). 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% 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. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Kingdom Sci-Tech better, we need to consider many other factors. For instance, we've identified 1 warning sign for Shenzhen Kingdom Sci-Tech that you should be aware of.

But note: Shenzhen Kingdom Sci-Tech may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.