Taking the occasional loss comes part and parcel with investing on the stock market. Anyone who held Jiumaojiu International Holdings Limited (HKG:9922) over the last year knows what a loser feels like. The share price is down a hefty 51% in that time. Jiumaojiu International Holdings hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time.
Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.
Even though the Jiumaojiu International Holdings share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past.
The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.
With a low yield of 0.4% we doubt that the dividend influences the share price much. Jiumaojiu International Holdings' revenue is actually up 54% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
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. You can see what analysts are predicting for Jiumaojiu International Holdings in this interactive graph of future profit estimates.
A Different Perspective
Jiumaojiu International Holdings shareholders are down 51% for the year (even including dividends), even worse than the market loss of 25%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 1.3%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand Jiumaojiu International Holdings better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Jiumaojiu International Holdings you should be aware of.
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. 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.