Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don’t succeed. To wit, the Sunshine 100 China Holdings Ltd (HKG:2608) share price managed to fall 57% over five long years. That’s an unpleasant experience for long term holders. And some of the more recent buyers are probably worried, too, with the stock falling 55% in the last year. In the last ninety days we’ve seen the share price slide 59%.

Check out our latest analysis for Sunshine 100 China Holdings

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

During the five years over which the share price declined, Sunshine 100 China Holdings’s earnings per share (EPS) dropped by 4.8% each year. Readers should note that the share price has fallen faster than the EPS, at a rate of 16% per year, over the period. This implies that the market is more cautious about the business these days. The less favorable sentiment is reflected in its current P/E ratio of 6.39.

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 Sunshine 100 China Holdings’s key metrics by checking this interactive graph of Sunshine 100 China Holdings’s earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 8.2% in the twelve months, Sunshine 100 China Holdings shareholders did even worse, losing 55%. 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 15% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Before deciding if you like the current share price, check how Sunshine 100 China Holdings scores on these 3 valuation metrics.

But note: Sunshine 100 China Holdings 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 HK exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.