While shareholders of Guangzhou Tech-Long Packaging MachineryLtd (SZSE:002209) are in the black over 3 years, those who bought a week ago aren't so fortunate

Guangzhou Tech-Long Packaging Machinery Co.,Ltd. (SZSE:002209) shareholders might be concerned after seeing the share price drop 17% in the last month. But that shouldn't obscure the pleasing returns achieved by shareholders over the last three years. In fact, the company's share price bested the return of its market index in that time, posting a gain of 22%.

While the stock has fallen 10% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for Guangzhou Tech-Long Packaging MachineryLtd

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).

During three years of share price growth, Guangzhou Tech-Long Packaging MachineryLtd moved from a loss to profitability. So we would expect a higher share price over the period.

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

Dive deeper into Guangzhou Tech-Long Packaging MachineryLtd's key metrics by checking this interactive graph of Guangzhou Tech-Long Packaging MachineryLtd's earnings, revenue and cash flow.

A Different Perspective

Guangzhou Tech-Long Packaging MachineryLtd shareholders are down 22% for the year (even including dividends), but the market itself is up 6.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 4%, 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. Before deciding if you like the current share price, check how Guangzhou Tech-Long Packaging MachineryLtd scores on these 3 valuation metrics.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.