iDreamSky Technology Holdings' (HKG:1119) Shareholders Are Down 10% On Their Shares

While not a mind-blowing move, it is good to see that the iDreamSky Technology Holdings Limited (HKG:1119) share price has gained 22% in the last three months. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 10% in the last year, well below the market return.

View our latest analysis for iDreamSky Technology 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. 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).

Unhappily, iDreamSky Technology Holdings had to report a 9.9% decline in EPS over the last year. This change in EPS is remarkably close to the 10% decrease in the share price. So it seems that the market sentiment has not changed much, despite the weak results. Instead, the change in the share price seems to reduction in earnings per share, alone.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free interactive report on iDreamSky Technology Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While iDreamSky Technology Holdings shareholders are down 10% for the year, the market itself is up 29%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. It's great to see a nice little 22% rebound in the last three months. This could just be a bounce because the selling was too aggressive, but fingers crossed it's the start of a new trend. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for iDreamSky Technology Holdings you should be aware of.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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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