While that may not be enough for some shareholders, we think it’s good to see the E-House (China) Enterprise Holdings Limited (HKG:2048) share price up 19% in a single quarter. But that doesn’t change the fact that returns over the past three years have been stomach-churning. Namely, the stock price fell 86% at that time. We are therefore relieved for long-term holders to see some improvement. The thing to think about is whether the business has truly recovered. We really feel for the shareholders in this scenario. It’s a good reminder of the importance of diversification, and it’s worth keeping in mind that there’s more to life than just money, anyway.
Given that the past week has been tough for shareholders, let’s take a look at the fundamentals and see what we can learn.
Check out our latest analysis for E-House (China) Enterprise Holdings
Although the efficient markets hypothesis continues to be taught by some, it has been proven that markets are dynamic systems that are too reactive and that investors are not always rational. One way to look at how market sentiment has changed over time is to look at the interaction between a company’s stock price and its earnings per share (EPS).
During the three years of stock price decline, earnings per share (EPS) of E-House (China) Enterprise Holdings fell significantly, falling to a loss. Since the company fell into a loss position, it is difficult to compare the change in EPS with the change in the share price. But it’s safe to say that we generally expect the stock price to be lower as a result!
You can see how EPS has changed over time in the image below (click on the graph to see the exact values).
Before buying or selling a stock, we always recommend a careful review of historical growth trends, available here.
A different perspective
The last twelve months have not been great for shares of E-House (China) Enterprise Holdings, which underperformed the market, costing holders 75% including dividends. Meanwhile, the broader market slipped around 9.0%, likely weighing on the stock. The loss of 23% per year over three years is not as bad as the last twelve months, which suggests that the company has not been able to convince the market that it has solved its problems. We would be hesitant to invest in a company with unresolved issues, although some investors will buy troubled stocks if they think the price is attractive enough. It is always interesting to follow the evolution of the share price over the long term. But to better understand E-House (China) Enterprise Holdings, we need to consider many other factors. For example, we have identified 2 warning signs for E-House (China) Enterprise Holdings of which you should be aware.
If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of companies that have proven that they can increase their profits.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently trading on HK exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.