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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Unfortunately the China Boqi Environmental (Holding) Co., Ltd. (HKG:2377) share price slid 15% over twelve months. That's disappointing when you consider the market returned -2.5%. We wouldn't rush to judgement on China Boqi Environmental (Holding) because we don't have a long term history to look at. It's up 1.2% in the last seven days.
Check out our latest analysis for China Boqi Environmental (Holding)
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...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
China Boqi Environmental (Holding) managed to increase earnings per share from a loss to a profit, over the last 12 months. We're surprised that the share price is lower given that improvement. If the company can sustain the earnings growth, this might be an inflection point for the business, which would make right now a really interesting time to study it more closely.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. Dive deeper into the earnings by checking this interactive graph of China Boqi Environmental (Holding)'s earnings, revenue and cash flow.
A Different Perspective
China Boqi Environmental (Holding) shareholders are down 15% for the year (even including dividends), even worse than the market loss of 2.5%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 5.7%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of China Boqi Environmental (Holding) by clicking this link.