The total return for Nanfang Zhongjin Environment (SZSE:300145) investors has risen faster than earnings growth over the last year

Nanfang Zhongjin Environment Co., Ltd. (SZSE:300145) shareholders might be concerned after seeing the share price drop 12% in the last month. But looking back over the last year, the returns have actually been rather pleasing! Looking at the full year, the company has easily bested an index fund by gaining 25%.

While this past week has detracted from the company's one-year return, let's look at the recent trends of the underlying business and see if the gains have been in alignment.

See our latest analysis for Nanfang Zhongjin Environment

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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).

Nanfang Zhongjin Environment was able to grow EPS by 14% in the last twelve months. This EPS growth is significantly lower than the 25% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It is of course excellent to see how Nanfang Zhongjin Environment has grown profits over the years, but the future is more important for shareholders. This free interactive report on Nanfang Zhongjin Environment's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Nanfang Zhongjin Environment shareholders have received a total shareholder return of 25% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3% per year), it would seem that the stock's performance has improved in recent times. 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 Nanfang Zhongjin Environment better, we need to consider many other factors. For instance, we've identified 2 warning signs for Nanfang Zhongjin Environment that you should be aware of.

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.