The five-year shareholder returns and company earnings persist lower as Sands China (HKG:1928) stock falls a further 3.5% in past week

Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example the Sands China Ltd. (HKG:1928) share price dropped 62% over five years. We certainly feel for shareholders who bought near the top. And it's not just long term holders hurting, because the stock is down 51% in the last year. Shareholders have had an even rougher run lately, with the share price down 33% in the last 90 days.

If the past week is anything to go by, investor sentiment for Sands China isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Sands China

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Sands China became profitable within the last five years. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics may better explain the share price move.

It could be that the revenue decline of 25% per year is viewed as evidence that Sands China is shrinking. This has probably encouraged some shareholders to sell down the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Sands China is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Sands China stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

Sands China shareholders are down 51% for the year, but the market itself is up 2.8%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 10% 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. It's always interesting to track share price performance over the longer term. But to understand Sands China better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Sands China you should be aware of.

But note: Sands China 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.