Caitong SecuritiesLtd (SHSE:601108) sheds CN¥2.7b, company earnings and investor returns have been trending downwards for past three years

Caitong Securities Co.,Ltd. (SHSE:601108) shareholders should be happy to see the share price up 27% in the last month. It's not great that the stock is down over the last three years. But that's not so bad when you consider its market is down 17%.

With the stock having lost 6.8% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Caitong SecuritiesLtd

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 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.

Caitong SecuritiesLtd saw its EPS decline at a compound rate of 12% per year, over the last three years. In comparison the 9% compound annual share price decline isn't as bad as the EPS drop-off. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Caitong SecuritiesLtd's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Caitong SecuritiesLtd shareholders, and that cash payout explains why its total shareholder loss of 15%, over the last 3 years, isn't as bad as the share price return.

A Different Perspective

It's good to see that Caitong SecuritiesLtd has rewarded shareholders with a total shareholder return of 3.7% in the last twelve months. There's no doubt those recent returns are much better than the TSR loss of 1.4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. Before forming an opinion on Caitong SecuritiesLtd you might want to consider these 3 valuation metrics.

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.