Ruifeng Power Group's (HKG:2025) Stock Price Has Reduced 26% In The Past Year

Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Ruifeng Power Group Company Limited (HKG:2025) shareholders over the last year, as the share price declined 26%. That falls noticeably short of the market return of around 27%. Zooming out, the stock is down 23% in the last three years. It's up 5.0% in the last seven days.

Check out our latest analysis for Ruifeng Power Group

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. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unhappily, Ruifeng Power Group had to report a 64% decline in EPS over the last year. The share price fall of 26% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized 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. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

A Different Perspective

The last twelve months weren't great for Ruifeng Power Group shares, which cost holders 24%, including dividends, while the market was up about 27%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Shareholders have lost 6% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. It's always interesting to track share price performance over the longer term. But to understand Ruifeng Power Group better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Ruifeng Power Group you should be aware of, and 1 of them is potentially serious.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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This article by Simply Wall St is general in nature. 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.
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