Realord Group Holdings (HKG:1196) earnings and shareholder returns have been trending downwards for the last year, but the stock increases 5.7% this past week

The simplest way to benefit from a rising market is to buy an index fund. But if you buy individual stocks, you can do both better or worse than that. Unfortunately the Realord Group Holdings Limited (HKG:1196) share price slid 38% over twelve months. That's well below the market return of 12%. Longer term investors have fared much better, since the share price is up 32% in three years. But it's up 5.7% in the last week.

The recent uptick of 5.7% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Realord Group Holdings

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Unhappily, Realord Group Holdings had to report a 11% decline in EPS over the last year. The share price decline of 38% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago. Of course, with a P/E ratio of 73.33, the market remains optimistic.

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

Dive deeper into Realord Group Holdings' key metrics by checking this interactive graph of Realord Group Holdings's earnings, revenue and cash flow.

A Different Perspective

Realord Group Holdings shareholders are down 38% for the year, but the market itself is up 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. Take risks, for example - Realord Group Holdings has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about.

For those who like to find winning investments this free list of growing 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 Hong Kong 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.