Zhengzhou Coal Industry & Electric Power (SHSE:600121) spikes 12% this week, taking five-year gains to 103%

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Zhengzhou Coal Industry & Electric Power Co., Ltd. (SHSE:600121) stock is up an impressive 103% over the last five years. It's even up 12% in the last week.

The past week has proven to be lucrative for Zhengzhou Coal Industry & Electric Power investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Zhengzhou Coal Industry & Electric Power

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the last half decade, Zhengzhou Coal Industry & Electric Power became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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

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. Dive deeper into the earnings by checking this interactive graph of Zhengzhou Coal Industry & Electric Power's earnings, revenue and cash flow.

A Different Perspective

Zhengzhou Coal Industry & Electric Power provided a TSR of 16% over the year. That's fairly close to the broader market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 15%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. Is Zhengzhou Coal Industry & Electric Power cheap compared to other companies? These 3 valuation measures might help you decide.

Of course Zhengzhou Coal Industry & Electric Power may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.