C C Land Holdings (HKG:1224 shareholders incur further losses as stock declines 10% this week, taking one-year losses to 32%

The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by C C Land Holdings Limited (HKG:1224) shareholders over the last year, as the share price declined 33%. That's disappointing when you consider the market declined 21%. Even if you look out three years, the returns are still disappointing, with the share price down30% in that time. More recently, the share price has dropped a further 13% in a month.

Since C C Land Holdings has shed HK$582m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for C C Land Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year C C Land Holdings saw its earnings per share drop below zero. Some investors no doubt dumped the stock as a result. Of course, if the company can turn the situation around, investors will likely profit.

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

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

A Different Perspective

While the broader market lost about 21% in the twelve months, C C Land Holdings shareholders did even worse, losing 32% (even including dividends). 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Even so, be aware that C C Land Holdings is showing 2 warning signs in our investment analysis , you should know about...

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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.