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If you love investing in stocks you're bound to buy some losers. Long term Chongqing Iron & Steel Company Limited (HKG:1053) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 62% in that time. The more recent news is of little comfort, with the share price down 24% in a year. The falls have accelerated recently, with the share price down 18% in the last three months. But this could be related to the weak market, which is down 8.0% in the same period.
Check out our latest analysis for Chongqing Iron & Steel
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.
Chongqing Iron & Steel became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So it's worth looking at other metrics to try to understand the share price move.
Revenue is actually up 56% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Chongqing Iron & Steel further; while we may be missing something on this analysis, there might also be an opportunity.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
While the broader market lost about 3.0% in the twelve months, Chongqing Iron & Steel shareholders did even worse, losing 24%. 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 12% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.