Shareholders of World Precision Machinery (WPM) have suffered a torrid time owning this company. Since 2013, shares of WPM have tumbled from a price of $0.40 to $0.196. That’s a decline of 51% (before accounting for dividends).

What it does

In one sentence: WPM makes metal stamping machines for hundreds of customers in China ranging from automotive plants to household appliances brands. Stamping machines are machines which bends/folds/presses metal sheets into the desired form required by the user. There are two types of machines manufactured by WPM – i) Conventional stamping machines and ii) High end stamping machines.

Decline of business

So what contributed to WPM’s decline in share price? Well the answer is because of a deterioration in orders for its stamping machines. While China is “growing”, it seems the manufacturing side of China is in contraction mode. Many stamping plants including WPM have experienced a decline …