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Bright Scholar Education Holdings' (NYSE:BEDU) Shareholders Are Down 65% On Their Shares

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Simply Wall St
·3 min read
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Investing in stocks inevitably means buying into some companies that perform poorly. But the last three years have been particularly tough on longer term Bright Scholar Education Holdings Limited (NYSE:BEDU) shareholders. Unfortunately, they have held through a 65% decline in the share price in that time. Contrary to the longer term story, the last month has been good for stockholders, with a share price gain of 9.6%.

Check out our latest analysis for Bright Scholar Education Holdings

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 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 three years that the share price fell, Bright Scholar Education Holdings' earnings per share (EPS) dropped by 15% each year. This reduction in EPS is slower than the 29% annual reduction in the share price. So it seems the market was too confident about the business, in the past.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

earnings-per-share-growth
earnings-per-share-growth

It might be well worthwhile taking a look at our free report on Bright Scholar Education Holdings' earnings, revenue and cash flow.

A Different Perspective

Over the last year, Bright Scholar Education Holdings shareholders took a loss of 19%, including dividends. In contrast the market gained about 39%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, the longer term story isn't pretty, with investment losses running at 18% per year over three years. We'd need clear signs of growth in the underlying business before we could muster much enthusiasm for this one. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Bright Scholar Education Holdings you should be aware of, and 1 of them is concerning.

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 US exchanges.

This article by Simply Wall St is general in nature. 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.

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