The five-year shareholder returns and company earnings persist lower as YUNDA Holding (SZSE:002120) stock falls a further 6.7% in past week

Generally speaking long term investing is the way to go. But along the way some stocks are going to perform badly. Zooming in on an example, the YUNDA Holding Co., Ltd. (SZSE:002120) share price dropped 67% in the last half decade. That's not a lot of fun for true believers. Unfortunately the share price momentum is still quite negative, with prices down 15% in thirty days.

Since YUNDA Holding has shed CN¥1.6b 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

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Looking back five years, both YUNDA Holding's share price and EPS declined; the latter at a rate of 10% per year. This reduction in EPS is less than the 20% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

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

We know that YUNDA Holding has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

We regret to report that YUNDA Holding shareholders are down 17% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 14%. 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. Unfortunately, longer term shareholders are suffering worse, given the loss of 11% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. It's always interesting to track share price performance over the longer term. But to understand YUNDA Holding better, we need to consider many other factors. Even so, be aware that YUNDA Holding is showing 1 warning sign in our investment analysis , you should know about...

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.

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