AAC Technologies Holdings' (HKG:2018) earnings trajectory could turn positive as the stock rises 4.3% this past week

Statistically speaking, long term investing is a profitable endeavour. But that doesn't mean long term investors can avoid big losses. Zooming in on an example, the AAC Technologies Holdings Inc. (HKG:2018) share price dropped 66% in the last half decade. That's not a lot of fun for true believers. Unfortunately the share price momentum is still quite negative, with prices down 15% in thirty days.

While the stock has risen 4.3% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

Check out our latest analysis for AAC Technologies Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

During the five years over which the share price declined, AAC Technologies Holdings' earnings per share (EPS) dropped by 34% each year. The share price decline of 19% per year isn't as bad as the EPS decline. So the market may previously have expected a drop, or else it expects the situation will improve.

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

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

A Different Perspective

While it's certainly disappointing to see that AAC Technologies Holdings shares lost 13% throughout the year, that wasn't as bad as the market loss of 16%. What is more upsetting is the 10% per annum loss investors have suffered over the last half decade. While the losses are slowing we doubt many shareholders are happy with the stock. It's always interesting to track share price performance over the longer term. But to understand AAC Technologies Holdings better, we need to consider many other factors. For instance, we've identified 1 warning sign for AAC Technologies Holdings that you should be aware of.

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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.