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Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in EFT Solutions Holdings Limited (HKG:8062) have tasted that bitter downside in the last year, as the share price dropped 43%. That contrasts poorly with the market return of 0.3%. Because EFT Solutions Holdings hasn't been listed for many years, the market is still learning about how the business performs.

Check out our latest analysis for EFT Solutions 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.

Unfortunately EFT Solutions Holdings reported an EPS drop of 55% for the last year. This fall in the EPS is significantly worse than the 43% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into EFT Solutions Holdings's key metrics by checking this interactive graph of EFT Solutions Holdings's earnings, revenue and cash flow.

A Different Perspective

Given that the market gained 0.3% in the last year, EFT Solutions Holdings shareholders might be miffed that they lost 43%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 2.9%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Is EFT Solutions Holdings cheap compared to other companies? These 3 valuation measures might help you decide.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.