How Much Did Ruifeng Power Group's(HKG:2025) Shareholders Earn From Share Price Movements Over The Last Year?

Investors can approximate the average market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Investors in Ruifeng Power Group Company Limited (HKG:2025) have tasted that bitter downside in the last year, as the share price dropped 29%. That falls noticeably short of the market return of around 12%. Ruifeng Power Group hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. The falls have accelerated recently, with the share price down 16% in the last three months.

View our latest analysis for Ruifeng Power Group

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...' 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.

Unhappily, Ruifeng Power Group had to report a 64% decline in EPS over the last year. The share price fall of 29% isn't as bad as the reduction in earnings per share. So the market may not be too worried about the EPS figure, at the moment -- or it may have expected earnings to drop faster.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Ruifeng Power Group's earnings, revenue and cash flow.

A Different Perspective

Given that the market gained 12% in the last year, Ruifeng Power Group shareholders might be miffed that they lost 28% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 16% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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. Even so, be aware that Ruifeng Power Group is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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

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