Some China Development Bank International Investment (HKG:1062) Shareholders Have Taken A Painful 74% Share Price Drop
Some stocks are best avoided. It hits us in the gut when we see fellow investors suffer a loss. Imagine if you held China Development Bank International Investment Limited (HKG:1062) for half a decade as the share price tanked 74%. And some of the more recent buyers are probably worried, too, with the stock falling 36% in the last year. The silver lining is that the stock is up 3.3% in about a week.
View our latest analysis for China Development Bank International Investment
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.
Looking back five years, both China Development Bank International Investment's share price and EPS declined; the latter at a rate of 8.8% per year. This reduction in EPS is less than the 24% annual reduction in the share price. So it seems the market was too confident about the business, in the past. The low P/E ratio of 10.37 further reflects this reticence.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It might be well worthwhile taking a look at our free report on China Development Bank International Investment's earnings, revenue and cash flow.
A Different Perspective
While the broader market lost about 11% in the twelve months, China Development Bank International Investment shareholders did even worse, losing 36%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 24% 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 China Development Bank International Investment better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with China Development Bank International Investment .
We will like China Development Bank International Investment better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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.
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. Thank you for reading.
