The one-year shareholder returns and company earnings persist lower as Zensun Enterprises (HKG:185) stock falls a further 11% in past week

The nature of investing is that you win some, and you lose some. Unfortunately, shareholders of Zensun Enterprises Limited (HKG:185) have suffered share price declines over the last year. In that relatively short period, the share price has plunged 68%. We note that it has not been easy for shareholders over three years, either; the share price is down 66% in that time. Furthermore, it's down 28% in about a quarter. That's not much fun for holders.

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

Check out our latest analysis for Zensun Enterprises

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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, Zensun Enterprises had to report a 64% decline in EPS over the last year. This proportional reduction in earnings per share isn't far from the 68% 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 image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

This free interactive report on Zensun Enterprises' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 4.7% in the last year, Zensun Enterprises shareholders lost 68%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Zensun Enterprises better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Zensun Enterprises .

We will like Zensun Enterprises better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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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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.