Miyakoshi Holdings (TSE:6620) stock falls 12% in past week as one-year earnings and shareholder returns continue downward trend

Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Miyakoshi Holdings, Inc. (TSE:6620) stock has had a really bad year. In that relatively short period, the share price has plunged 59%. On the other hand, the stock is actually up 3.6% over three years. The falls have accelerated recently, with the share price down 21% in the last three months.

After losing 12% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

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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 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.

Unfortunately Miyakoshi Holdings reported an EPS drop of 50% for the last year. This proportional reduction in earnings per share isn't far from the 59% decrease in the share price. Given the lower EPS we might have expected investors to lose confidence in the stock, but that doesn't seemed to have happened. Instead, the change in the share price seems to reduction in earnings per share, alone.

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

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

A Different Perspective

Miyakoshi Holdings shareholders are down 59% for the year, but the market itself is up 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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 Miyakoshi Holdings (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course Miyakoshi Holdings 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 Japanese 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.