This week we saw the Joy Spreader Group Inc. (HKG:6988) share price climb by 21%. But that's not enough to compensate for the decline over the last twelve months. During that time the share price has sank like a stone, descending 54%. Some might say the recent bounce is to be expected after such a bad drop. It may be that the fall was an overreaction.

While the stock has risen 21% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

View our latest analysis for Joy Spreader Group

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Joy Spreader Group saw its earnings per share drop below zero. Some investors no doubt dumped the stock as a result. We hope for shareholders' sake that the company becomes profitable again soon.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Joy Spreader Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We doubt Joy Spreader Group shareholders are happy with the loss of 54% over twelve months. That falls short of the market, which lost 3.9%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. With the stock down 6.4% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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 example, we've discovered 1 warning sign for Joy Spreader Group that you should be aware of before investing here.

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 Hong Kong exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.