Hollyland (China) Electronics Technology (SZSE:002729) sheds CN¥225m, company earnings and investor returns have been trending downwards for past year

It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by Hollyland (China) Electronics Technology Corporation Limited (SZSE:002729) shareholders over the last year, as the share price declined 49%. That's disappointing when you consider the market declined 9.6%. Notably, shareholders had a tough run over the longer term, too, with a drop of 44% in the last three years. Furthermore, it's down 28% in about a quarter. That's not much fun for holders.

Since Hollyland (China) Electronics Technology has shed CN¥225m 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 Hollyland (China) Electronics Technology

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

Unfortunately Hollyland (China) Electronics Technology reported an EPS drop of 37% for the last year. The share price decline of 49% is actually more than the EPS drop. Unsurprisingly, given the lack of EPS growth, the market seems to be more cautious about the stock. Of course, with a P/E ratio of 96.24, the market remains optimistic.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Hollyland (China) Electronics Technology's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 9.6% in the twelve months, Hollyland (China) Electronics Technology shareholders did even worse, losing 49% (even including dividends). 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 4% 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 Hollyland (China) Electronics Technology better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Hollyland (China) Electronics Technology you should know about.

We will like Hollyland (China) Electronics Technology better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.