The simplest way to benefit from a rising market is to buy an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. Unfortunately the Fu Shou Yuan International Group Limited (HKG:1448) share price slid 38% over twelve months. That's disappointing when you consider the market declined 23%. At least the damage isn't so bad if you look at the last three years, since the stock is down 18% in that time.
While the stock has risen 3.8% 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 Fu Shou Yuan International Group
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share ( EPS ) with the share price movement.
During the unfortunate twelve months during which the Fu Shou Yuan International Group share price fell, it actually saw its earnings per share (EPS) improve by 15%. Of course, the situation might betray previous over-optimism about growth.
The divergence between the EPS and the share price is quite notable, during the year. So it's easy to justify a look at some other metrics.
Fu Shou Yuan International Group managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).SEHK:1448 Earnings and Revenue Growth May 30th 2022
We know that Fu Shou Yuan International Group has improved its bottom line lately, but what does the future have in store? This free report showing analyst forecasts should help you form a view on Fu Shou Yuan International Group
A Different Perspective
While the broader market lost about 23% in the twelve months, Fu Shou Yuan International Group shareholders did even worse, losing 38% (even including dividends). 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. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
Of course Fu Shou Yuan International Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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.