Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Wing Yip Food (China) Holdings Group Limited (KOSDAQ:900340) share price is down 29% in the last year. That's disappointing when you consider the market returned 49%. Wing Yip Food (China) Holdings Group hasn't been listed for long, so although we're wary of recent listings that perform poorly, it may still prove itself with time. It's down 3.5% in the last seven days.
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).
Unfortunately Wing Yip Food (China) Holdings Group reported an EPS drop of 49% for the last year. This fall in the EPS is significantly worse than the 29% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
Dive deeper into Wing Yip Food (China) Holdings Group's key metrics by checking this interactive graph of Wing Yip Food (China) Holdings Group's earnings, revenue and cash flow.
A Different Perspective
Given that the market gained 49% in the last year, Wing Yip Food (China) Holdings Group shareholders might be miffed that they lost 28%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 9.2% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. To that end, you should learn about the 4 warning signs we've spotted with Wing Yip Food (China) Holdings Group (including 1 which is a bit unpleasant) .
But note: Wing Yip Food (China) Holdings Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on KR 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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