Wuxi Longsheng TechnologyLtd's (SZSE:300680) 28% CAGR outpaced the company's earnings growth over the same five-year period

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the Wuxi Longsheng Technology Co.,Ltd (SZSE:300680) share price has soared 233% in the last half decade. Most would be very happy with that. Also pleasing for shareholders was the 63% gain in the last three months. But this move may well have been assisted by the reasonably buoyant market (up 28% in 90 days).

Since it's been a strong week for Wuxi Longsheng TechnologyLtd shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Wuxi Longsheng TechnologyLtd

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).

Over half a decade, Wuxi Longsheng TechnologyLtd managed to grow its earnings per share at 58% a year. The EPS growth is more impressive than the yearly share price gain of 27% over the same period. So one could conclude that the broader market has become more cautious towards the stock.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Wuxi Longsheng TechnologyLtd has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Wuxi Longsheng TechnologyLtd the TSR over the last 5 years was 242%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We're pleased to report that Wuxi Longsheng TechnologyLtd shareholders have received a total shareholder return of 39% over one year. And that does include the dividend. That's better than the annualised return of 28% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Wuxi Longsheng TechnologyLtd better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Wuxi Longsheng TechnologyLtd .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.