Yunda Holding Group (SZSE:002120) sheds CN¥752m, company earnings and investor returns have been trending downwards for past five years

Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example, after five long years the Yunda Holding Group Co., Ltd. (SZSE:002120) share price is a whole 70% lower. That's not a lot of fun for true believers. Shareholders have had an even rougher run lately, with the share price down 15% in the last 90 days.

Since Yunda Holding Group has shed CN¥752m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Yunda Holding Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the five years over which the share price declined, Yunda Holding Group's earnings per share (EPS) dropped by 6.8% each year. This reduction in EPS is less than the 21% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 11.64.

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

It might be well worthwhile taking a look at our free report on Yunda Holding Group's earnings, revenue and cash flow.

A Different Perspective

Yunda Holding Group shareholders gained a total return of 5.1% during the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 11% endured over half a decade. It could well be that the business is stabilizing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 1 warning sign for Yunda Holding Group that you should be aware of before investing here.

But note: Yunda Holding Group 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.

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.