Jiangsu Sanfame Polyester MaterialLtd (SHSE:600370) adds CN¥390m to market cap in the past 7 days, though investors from five years ago are still down 51%

We think intelligent long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example, after five long years the Jiangsu Sanfame Polyester Material Co.,Ltd. (SHSE:600370) share price is a whole 58% lower. That's not a lot of fun for true believers. We also note that the stock has performed poorly over the last year, with the share price down 55%. The falls have accelerated recently, with the share price down 33% in the last three months.

The recent uptick of 8.5% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Jiangsu Sanfame Polyester MaterialLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

In the last half decade Jiangsu Sanfame Polyester MaterialLtd saw its share price fall as its EPS declined below zero. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But we would generally expect a lower price, given the situation.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Jiangsu Sanfame Polyester MaterialLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Jiangsu Sanfame Polyester MaterialLtd's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that Jiangsu Sanfame Polyester MaterialLtd's TSR, which was a 51% drop over the last 5 years, was not as bad as the share price return.

A Different Perspective

We regret to report that Jiangsu Sanfame Polyester MaterialLtd shareholders are down 55% for the year. Unfortunately, that's worse than the broader market decline of 20%. 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 9% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Jiangsu Sanfame Polyester MaterialLtd is showing 2 warning signs in our investment analysis , you should know about...

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com