Kingfa Science & Technology (India)'s (NSE:KINGFA) Stock Price Has Reduced 30% In The Past Three Years

While not a mind-blowing move, it is good to see that the Kingfa Science & Technology (India) Limited (NSE:KINGFA) share price has gained 21% in the last three months. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 30% in the last three years, significantly under-performing the market.

Check out our latest analysis for Kingfa Science & Technology (India)

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. 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).

During the three years that the share price fell, Kingfa Science & Technology (India)'s earnings per share (EPS) dropped by 12% each year. This change in EPS is reasonably close to the 11% average annual decrease in the share price. That suggests that the market sentiment around the company hasn't changed much over that time, despite the disappointment. In this case, it seems that the EPS is guiding the share price.

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

Kingfa Science & Technology (India) shareholders are down 4.0% for the year, but the broader market is up 14%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, the longer term story isn't pretty, with investment losses running at 9% per year over three years. We'd need clear signs of growth in the underlying business before we could muster much enthusiasm for this one. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Kingfa Science & Technology (India) is showing 2 warning signs in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

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This article by Simply Wall St is general in nature. 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.
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