Investors three-year losses continue as China Sandi Holdings (HKG:910) dips a further 11% this week, earnings continue to decline

As every investor would know, not every swing hits the sweet spot. But you want to avoid the really big losses like the plague. So take a moment to sympathize with the long term shareholders of China Sandi Holdings Limited (HKG:910), who have seen the share price tank a massive 72% over a three year period. That'd be enough to cause even the strongest minds some disquiet. And over the last year the share price fell 24%, so we doubt many shareholders are delighted. Unfortunately the share price momentum is still quite negative, with prices down 14% in thirty days. We do note, however, that the broader market is down 5.9% in that period, and this may have weighed on the share price.

Since China Sandi Holdings has shed HK$107m 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 China Sandi Holdings

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

During the three years that the share price fell, China Sandi Holdings' earnings per share (EPS) dropped by 56% each year. This fall in the EPS is worse than the 35% compound annual share price fall. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market lost about 4.1% in the twelve months, China Sandi Holdings shareholders did even worse, losing 24%. 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 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 China Sandi Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for China Sandi Holdings (of which 1 is a bit unpleasant!) you should know about.

If you are like me, then you will 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 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.