Investors five-year losses continue as Beijing Enterprises Environment Group (HKG:154) dips a further 25% this week, earnings continue to decline

We think intelligent long term investing is the way to go. But unfortunately, some companies simply don't succeed. For example, after five long years the Beijing Enterprises Environment Group Limited (HKG:154) share price is a whole 59% lower. That is extremely sub-optimal, to say the least. The last week also saw the share price slip down another 25%. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

Check out our latest analysis for Beijing Enterprises Environment 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 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.

Looking back five years, both Beijing Enterprises Environment Group's share price and EPS declined; the latter at a rate of 6.3% per year. This reduction in EPS is less than the 16% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The low P/E ratio of 2.63 further reflects this reticence.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

While the broader market lost about 9.9% in the twelve months, Beijing Enterprises Environment Group shareholders did even worse, losing 14%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. However, the loss over the last year isn't as bad as the 10% per annum loss investors have suffered over the last half decade. 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 Beijing Enterprises Environment Group better, we need to consider many other factors. Take risks, for example - Beijing Enterprises Environment Group has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

But note: Beijing Enterprises Environment Group 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 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.