Guangdong Dongfang Precision Science & Technology's (SZSE:002611) three-year earnings growth trails the splendid shareholder returns

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. To wit, the Guangdong Dongfang Precision Science & Technology Co., Ltd. (SZSE:002611) share price has flown 182% in the last three years. Most would be happy with that. And in the last week the share price has popped 7.0%.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

View our latest analysis for Guangdong Dongfang Precision Science & Technology

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

Guangdong Dongfang Precision Science & Technology was able to grow its EPS at 5.2% per year over three years, sending the share price higher. This EPS growth is lower than the 41% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did three years ago. It's not unusual to see the market 're-rate' a stock, after a few years of growth.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

It's good to see that Guangdong Dongfang Precision Science & Technology has rewarded shareholders with a total shareholder return of 49% in the last twelve months. That's better than the annualised return of 21% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Guangdong Dongfang Precision Science & Technology better, we need to consider many other factors. Even so, be aware that Guangdong Dongfang Precision Science & Technology is showing 1 warning sign in our investment analysis , you should know about...

But note: Guangdong Dongfang Precision Science & Technology may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese 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.