The main aim of stock picking is to find the market-beating stocks. But the main game is to find enough winners to more than offset the losers So we wouldn’t blame long term EcoFirst Consolidated Bhd (KLSE:ECOFIRS) shareholders for doubting their decision to hold, with the stock down 13% over a half decade.

So let’s have a look and see if the longer term performance of the company has been in line with the underlying business’ progress.

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While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

EcoFirst Consolidated Bhd became profitable within the last five years. Most would consider that to be a good thing, so it’s counter-intuitive to see the share price declining. Other metrics might give us a better handle on how its value is changing over time.

Revenue is actually up 54% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at EcoFirst Consolidated Bhd’s financial health with this free report on its balance sheet.

Investors in EcoFirst Consolidated Bhd had a tough year, with a total loss of 13%, against a market gain of about 8.8%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year’s performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It’s always interesting to track share price performance over the longer term. But to understand EcoFirst Consolidated Bhd better, we need to consider many other factors. Even so, be aware that EcoFirst Consolidated Bhd is showing 3 warning signs in our investment analysis , you should know about…