The truth is, if you invest long enough, you’ll eventually end up with some losing stocks.long term Geely Automobile Holding Co., Ltd. (HKG:175)’s share price has fallen significantly over three years, so shareholders are well aware of this. Sadly for them, the stock price has fallen 59% in that time.
The past three years have been tough for Geely Automobile Holdings shareholders, but last week saw a bright spot. So let’s take a look at the long-term fundamentals and see if they are driving the negative returns.
Check out our latest analysis for Geely Automobile Holdings.
in his essay Graham & Doddsville SuperInvestors Warren Buffett has said that stock prices do not always rationally reflect the value of a company. One imperfect but simple way to consider how the market perception of a company has changed is to compare the change in the earnings per share (EPS) with the share price movement.
Over the three years that the share price fell, Geely Automobile Holding’s earnings per share (EPS) declined by 10% every year. This decline in EPS is slower than the 26% annual decline in the share price. So it seems like the market used to have too much confidence in this business.
The company’s earnings per share (long-term) are depicted in the image below (click to see the exact numbers).
We know that Geely Automobile Holdings has improved its earnings recently, but will it grow? free A report showing analyst revenue forecasts can help determine whether EPS growth is sustainable.
different perspective
While the broader market rose about 2.5% last year, Geely Automobile Holding shareholders lost 6.5% (even including dividends). Even blue-chip stocks can see their share prices drop from time to time, and we like to see improvement in a company’s fundamental metrics before we get too interested. Unfortunately, the suffering of long-term shareholders is even worse, considering that over the past five years he has incurred a loss of 5%. Before we can gather much enthusiasm, we need to see continued improvement in key metrics. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, consider risk.Every company has them and we discovered that 1 warning sign for Geely Automobile Holding you should know about.
However, please note: Geely Automobile Holdings may not be the best stock to buy.So take a look at this free A list of interesting companies that have grown their earnings in the past (and are predicted to grow in the future).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.
Valuation is complex, but we help make it simple.
Check out our comprehensive analysis, including below, to see if Geely Automobile Holdings is potentially overvalued or undervalued. Fair value estimates, risks and caveats, dividends, insider trading, and financial health.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.