Qingdao Tianneng Heavy IndustriesLtd (SZSE:300569) earnings and shareholder returns have been trending downwards for the last three years, but the stock pops 18% this past week

Qingdao Tianneng Heavy Industries Co.,Ltd (SZSE:300569) shareholders should be happy to see the share price up 18% in the last week. Meanwhile over the last three years the stock has dropped hard. In that time, the share price dropped 63%. So it is really good to see an improvement. The rise has some hopeful, but turnarounds are often precarious.

The recent uptick of 18% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for Qingdao Tianneng Heavy IndustriesLtd

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Qingdao Tianneng Heavy IndustriesLtd saw its EPS decline at a compound rate of 36% per year, over the last three years. This fall in the EPS is worse than the 28% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Qingdao Tianneng Heavy IndustriesLtd's key metrics by checking this interactive graph of Qingdao Tianneng Heavy IndustriesLtd's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Qingdao Tianneng Heavy IndustriesLtd shareholders are down 35% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 10%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with Qingdao Tianneng Heavy IndustriesLtd (including 2 which are potentially serious) .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.