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Investing in stocks inevitably means buying into some companies that perform poorly. But long term Kellton Tech Solutions Limited (NSE:KELLTONTEC) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 67% in that time. And more recent buyers are having a tough time too, with a drop of 42% in the last year. On top of that, the share price has dropped a further 27% in a month.

See our latest analysis for Kellton Tech Solutions

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Although the share price is down over three years, Kellton Tech Solutions actually managed to grow EPS by 26% per year in that time. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Alternatively, growth expectations may have been unreasonable in the past. It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

We note that, in three years, revenue has actually grown at a 23% annual rate, so that doesn't seem to be a reason to sell shares. This analysis is just perfunctory, but it might be worth researching Kellton Tech Solutions more closely, as sometimes stocks fall unfairly. This could present an opportunity.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

If you are thinking of buying or selling Kellton Tech Solutions stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

The last twelve months weren't great for Kellton Tech Solutions shares, which performed worse than the market, costing holders 42%. The market shed around 3.8%, no doubt weighing on the stock price. The three-year loss of 31% per year isn't as bad as the last twelve months, suggesting that the company has not been able to convince the market it has solved its problems. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.