As an investor, mistakes are inevitable. But really bad investments should be rare. So spare a thought for the long term shareholders of Yihai International Holding Ltd. (HKG:1579); the share price is down a whopping 87% in the last three years. That would be a disturbing experience. The more recent news is of little comfort, with the share price down 56% in a year. Furthermore, it's down 21% in about a quarter. That's not much fun for holders. While a drop like that is definitely a body blow, money isn't as important as health and happiness.

If the past week is anything to go by, investor sentiment for Yihai International Holding isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Yihai International Holding

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the three years that the share price fell, Yihai International Holding's earnings per share (EPS) dropped by 0.2% each year. The share price decline of 49% is actually steeper than the EPS slippage. So it seems the market was too confident about the business, in the past.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Yihai International Holding has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Yihai International Holding will grow revenue in the future.

A Different Perspective

We regret to report that Yihai International Holding shareholders are down 56% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 3.0%. 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 7% 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. Before deciding if you like the current share price, check how Yihai International Holding scores on these 3 valuation metrics.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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