Further weakness as Beijing Si-Tech Information Technology (SZSE:300608) drops 9.8% this week, taking one-year losses to 25%

It is doubtless a positive to see that the Beijing Si-Tech Information Technology Co., Ltd. (SZSE:300608) share price has gained some 35% in the last three months. But in truth the last year hasn't been good for the share price. In fact, the price has declined 25% in a year, falling short of the returns you could get by investing in an index fund.

Since Beijing Si-Tech Information Technology has shed CN¥448m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Beijing Si-Tech Information 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.

Beijing Si-Tech Information Technology fell to a loss making position during the year. Buyers no doubt think it's a temporary situation, but those with a nose for quality have low tolerance for losses. We hope for shareholders' sake that the company becomes profitable again soon.

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

Dive deeper into Beijing Si-Tech Information Technology's key metrics by checking this interactive graph of Beijing Si-Tech Information Technology's earnings, revenue and cash flow.

A Different Perspective

While the broader market gained around 12% in the last year, Beijing Si-Tech Information Technology shareholders lost 25% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 3% 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. Take risks, for example - Beijing Si-Tech Information Technology has 2 warning signs we think you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.