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If You Had Bought CNFinance Holdings (NYSE:CNF) Stock A Year Ago, You'd Be Sitting On A 33% Loss, Today

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CNFinance Holdings Limited (NYSE:CNF) shareholders should be happy to see the share price up 10% in the last week. But that is minimal compensation for the share price under-performance over the last year. In fact, the price has declined 33% in a year, falling short of the returns you could get by investing in an index fund.

See our latest analysis for CNFinance Holdings

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Unhappily, CNFinance Holdings had to report a 43% decline in EPS over the last year. This fall in the EPS is significantly worse than the 33% the share price fall. It may have been that the weak EPS was not as bad as some had feared.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

NYSE:CNF Past and Future Earnings May 1st 2020
NYSE:CNF Past and Future Earnings May 1st 2020

Dive deeper into CNFinance Holdings's key metrics by checking this interactive graph of CNFinance Holdings's earnings, revenue and cash flow.

A Different Perspective

Given that the market gained 1.4% in the last year, CNFinance Holdings shareholders might be miffed that they lost 33%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. The share price decline has continued throughout the most recent three months, down 8.5%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. 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. For example, we've discovered 2 warning signs for CNFinance Holdings (1 is concerning!) 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 US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.