Further weakness as Ezdan Holding Group Q.P.S.C (DSM:ERES) drops 4.3% this week, taking three-year losses to 52%

If you love investing in stocks you're bound to buy some losers. Long term Ezdan Holding Group Q.P.S.C. (DSM:ERES) shareholders know that all too well, since the share price is down considerably over three years. Unfortunately, they have held through a 52% decline in the share price in that time.

If the past week is anything to go by, investor sentiment for Ezdan Holding Group Q.P.S.C isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Ezdan Holding Group Q.P.S.C

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Over the three years that the share price declined, Ezdan Holding Group Q.P.S.C's earnings per share (EPS) dropped significantly, falling to a loss. Extraordinary items contributed to this situation. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. However, we can say we'd expect to see a falling share price in this scenario.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on Ezdan Holding Group Q.P.S.C's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 1.7% in the twelve months, Ezdan Holding Group Q.P.S.C shareholders did even worse, losing 13%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Ezdan Holding Group Q.P.S.C better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Ezdan Holding Group Q.P.S.C (at least 1 which is significant) , and understanding them should be part of your investment process.

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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 Qatari 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.