NanJing Research Institute of Surveying Mapping & Geotechnical InvestigationLtd (SZSE:300826) shareholders have lost 8.6% over 5 years, earnings decline likely the culprit

For many, the main point of investing is to generate higher returns than the overall market. But even the best stock picker will only win with some selections. So we wouldn't blame long term NanJing Research Institute of Surveying, Mapping & Geotechnical Investigation, Co.Ltd (SZSE:300826) shareholders for doubting their decision to hold, with the stock down 14% over a half decade. In the last ninety days we've seen the share price slide 15%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

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 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).

Looking back five years, both NanJing Research Institute of Surveying Mapping & Geotechnical InvestigationLtd's share price and EPS declined; the latter at a rate of 16% per year. The share price decline of 3% per year isn't as bad as the EPS decline. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline. With a P/E ratio of 59.25, it's fair to say the market sees a brighter future for the business.

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

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

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for NanJing Research Institute of Surveying Mapping & Geotechnical InvestigationLtd the TSR over the last 5 years was -8.6%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

NanJing Research Institute of Surveying Mapping & Geotechnical InvestigationLtd shareholders have received returns of 14% over twelve months (even including dividends), which isn't far from the general market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 1.7%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for NanJing Research Institute of Surveying Mapping & Geotechnical InvestigationLtd. 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. For instance, we've identified 3 warning signs for NanJing Research Institute of Surveying Mapping & Geotechnical InvestigationLtd (1 doesn't sit too well with us) that you should be aware of.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.