Investors one-year losses continue as Weaver Network Technology (SHSE:603039) dips a further 5.1% this week, earnings continue to decline

Investing in stocks comes with the risk that the share price will fall. Anyone who held Weaver Network Technology Co., Ltd. (SHSE:603039) over the last year knows what a loser feels like. To wit the share price is down 61% in that time. To make matters worse, the returns over three years have also been really disappointing (the share price is 61% lower than three years ago). Unfortunately the share price momentum is still quite negative, with prices down 16% in thirty days.

With the stock having lost 5.1% 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 Weaver Network Technology

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Unfortunately Weaver Network Technology reported an EPS drop of 0.6% for the last year. This reduction in EPS is not as bad as the 61% share price fall. This suggests the EPS fall has made some shareholders more nervous about the business.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Weaver Network Technology's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Weaver Network Technology shareholders are down 61% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 17%. 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 5% 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. Is Weaver Network Technology cheap compared to other companies? These 3 valuation measures might help you decide.

Of course Weaver Network Technology 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