The five-year shareholder returns and company earnings persist lower as China Transinfo Technology (SZSE:002373) stock falls a further 15% in past week

Generally speaking long term investing is the way to go. But no-one is immune from buying too high. To wit, the China Transinfo Technology Co., Ltd (SZSE:002373) share price managed to fall 55% over five long years. That is extremely sub-optimal, to say the least. More recently, the share price has dropped a further 16% in a month. However, we note the price may have been impacted by the broader market, which is down 7.7% in the same time period.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Check out our latest analysis for China Transinfo Technology

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Looking back five years, both China Transinfo Technology's share price and EPS declined; the latter at a rate of 24% per year. The share price decline of 15% per year isn't as bad as the EPS decline. So the market may previously have expected a drop, or else it expects the situation will improve. The high P/E ratio of 60.40 suggests that shareholders believe earnings will grow in the years ahead.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that China Transinfo Technology has improved its bottom line lately, but is it going to grow revenue? Check if analysts think China Transinfo Technology will grow revenue in the future.

A Different Perspective

Investors in China Transinfo Technology had a tough year, with a total loss of 16% (including dividends), against a market gain of about 6.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 9% 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. Before forming an opinion on China Transinfo Technology you might want to consider these 3 valuation metrics.

But note: China Transinfo Technology 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.