If You Had Bought China Crystal New Material HoldingsLtd's (KOSDAQ:900250) Shares Three Years Ago You Would Be Down 23%

For many investors, the main point of stock picking is to generate higher returns than the overall market. But the risk of stock picking is that you will likely buy under-performing companies. We regret to report that long term China Crystal New Material Holdings Co.,Ltd. (KOSDAQ:900250) shareholders have had that experience, with the share price dropping 23% in three years, versus a market return of about 22%. More recently, the share price has dropped a further 11% in a month.

Check out our latest analysis for China Crystal New Material HoldingsLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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).

China Crystal New Material HoldingsLtd saw its EPS decline at a compound rate of 5.9% per year, over the last three years. This reduction in EPS is slower than the 8% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The less favorable sentiment is reflected in its current P/E ratio of 4.72.

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

It might be well worthwhile taking a look at our free report on China Crystal New Material HoldingsLtd's earnings, revenue and cash flow.

A Different Perspective

Over the last year, China Crystal New Material HoldingsLtd shareholders took a loss of 4.6%. In contrast the market gained about 32%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. However, the loss over the last year isn't as bad as the 7% per annum loss investors have suffered over the last three years. We'd need clear signs of growth in the underlying business before we could muster much enthusiasm for this one. It's always interesting to track share price performance over the longer term. But to understand China Crystal New Material HoldingsLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for China Crystal New Material HoldingsLtd that you should be aware of.

But note: China Crystal New Material HoldingsLtd 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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