Such Is Life: How FingerTango (HKG:6860) Shareholders Saw Their Shares Drop 56%
FingerTango Inc. (HKG:6860) shareholders will doubtless be very grateful to see the share price up 45% in the last quarter. But that's not enough to compensate for the decline over the last twelve months. During that time the share price has sank like a stone, descending 56%. Some might say the recent bounce is to be expected after such a bad drop. Of course, it could be that the fall was overdone.
See our latest analysis for FingerTango
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.
Unfortunately FingerTango reported an EPS drop of 59% for the last year. Remarkably, he share price decline of 56% per year is particularly close to the EPS drop. Therefore one could posit that the market has not become more concerned about the company, despite the lower EPS. Instead, the change in the share price seems to reduction in earnings per share, alone.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
Given that the market gained 9.9% in the last year, FingerTango shareholders might be miffed that they lost 56%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. It's great to see a nice little 45% rebound in the last three months. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand FingerTango better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for FingerTango you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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.
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