Guangdong Meiyanjixiang HydropowerLtd (SHSE:600868 shareholders incur further losses as stock declines 16% this week, taking five-year losses to 46%

For many, the main point of investing is to generate higher returns than the overall market. But the main game is to find enough winners to more than offset the losers So we wouldn't blame long term Guangdong Meiyanjixiang Hydropower Co.,Ltd. (SHSE:600868) shareholders for doubting their decision to hold, with the stock down 46% over a half decade. We also note that the stock has performed poorly over the last year, with the share price down 24%. On top of that, the share price is down 16% in the last week.

Since Guangdong Meiyanjixiang HydropowerLtd has shed CN¥740m 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 Guangdong Meiyanjixiang HydropowerLtd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

In the last half decade Guangdong Meiyanjixiang HydropowerLtd saw its share price fall as its EPS declined below zero. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But we would generally expect a lower price, given the situation.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on Guangdong Meiyanjixiang HydropowerLtd's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 9.6% in the twelve months, Guangdong Meiyanjixiang HydropowerLtd shareholders did even worse, losing 24%. 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, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8% over the last half decade. 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. 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. Even so, be aware that Guangdong Meiyanjixiang HydropowerLtd is showing 1 warning sign in our investment analysis , you should know about...

But note: Guangdong Meiyanjixiang HydropowerLtd 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.