Shareholders in 360 Security Technology (SHSE:601360) have lost 62%, as stock drops 5.0% this past week

Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. To wit, the 360 Security Technology Inc. (SHSE:601360) share price managed to fall 63% over five long years. We certainly feel for shareholders who bought near the top. And we doubt long term believers are the only worried holders, since the stock price has declined 45% over the last twelve months. Furthermore, it's down 15% in about a quarter. That's not much fun for holders.

Since 360 Security Technology has shed CN¥2.9b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for 360 Security Technology

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

360 Security Technology has made a profit in the past. However, it made a loss in the last twelve months, suggesting profit may be an unreliable metric at this stage. Other metrics might give us a better handle on how its value is changing over time.

The modest 1.3% dividend yield is unlikely to be guiding the market view of the stock. It could be that the revenue decline of 8.6% per year is viewed as evidence that 360 Security Technology is shrinking. That could explain the weak share price.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

If you are thinking of buying or selling 360 Security Technology stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We regret to report that 360 Security Technology shareholders are down 45% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 12%. 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 10% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand 360 Security Technology better, we need to consider many other factors. Even so, be aware that 360 Security Technology is showing 1 warning sign in our investment analysis , you should know about...

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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.