The nature of investing is that you win some, and you lose some. And unfortunately for China Kepei Education Group Limited (HKG:1890) shareholders, the stock is a lot lower today than it was a year ago. In that relatively short period, the share price has plunged 65%. Notably, shareholders had a tough run over the longer term, too, with a drop of 42% in the last three years. Furthermore, it's down 23% in about a quarter. That's not much fun for holders. Of course, this share price action may well have been influenced by the 15% decline in the broader market, throughout the period.

With the stock having lost 10.0% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

See our latest analysis for China Kepei Education Group

There is no denying that markets are sometimes efficient, but prices do not always reflect 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.

Unhappily, China Kepei Education Group had to report a 25% decline in EPS over the last year. The share price decline of 65% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business. The P/E ratio of 8.38 also points to the negative market sentiment.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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. It might be well worthwhile taking a look at our free report on China Kepei Education Group's earnings, revenue and cash flow.

A Different Perspective

China Kepei Education Group shareholders are down 64% for the year (even including dividends), falling short of the market return. Meanwhile, the broader market slid about 24%, likely weighing on the stock. Shareholders have lost 11% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for China Kepei Education Group (1 is concerning) that you should be aware of.

China Kepei Education Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.