Despite delivering investors losses of 13% over the past 1 year, Sunsuria Berhad (KLSE:SUNSURIA) has been growing its earnings

Investors can approximate the average market return by buying an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. That downside risk was realized by Sunsuria Berhad (KLSE:SUNSURIA) shareholders over the last year, as the share price declined 15%. That contrasts poorly with the market return of 3.8%. The silver lining (for longer term investors) is that the stock is still 11% higher than it was three years ago.

On a more encouraging note the company has added RM40m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Even though the Sunsuria Berhad share price is down over the year, its EPS actually improved. Of course, the situation might betray previous over-optimism about growth.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.

We don't see any weakness in the Sunsuria Berhad's dividend so the steady payout can't really explain the share price drop. In fact, it seems more likely that the revenue fall of 5.5% in the last year is the worry. The market may be extrapolating the decline, leading to questions around the sustainability of the EPS.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that Sunsuria Berhad has improved its bottom line lately, but what does the future have in store? So we recommend checking out this free report showing consensus forecasts

A Different Perspective

Sunsuria Berhad shareholders are down 13% for the year (even including dividends), but the market itself is up 3.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Sunsuria Berhad better, we need to consider many other factors. Take risks, for example - Sunsuria Berhad has 4 warning signs (and 1 which is concerning) we think you should know about.

Of course Sunsuria Berhad may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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