Shareholders in Vanfund Urban Investment and Development (SZSE:000638) have lost 19%, as stock drops 12% this past week

It is doubtless a positive to see that the Vanfund Urban Investment and Development Co., Ltd. (SZSE:000638) share price has gained some 45% in the last three months. But that is minimal compensation for the share price under-performance over the last year. After all, the share price is down 19% in the last year, significantly under-performing the market.

If the past week is anything to go by, investor sentiment for Vanfund Urban Investment and Development isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Vanfund Urban Investment and Development

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 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.

During the last year Vanfund Urban Investment and Development grew its earnings per share, moving from a loss to a profit.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. So it makes sense to check out some other factors.

Vanfund Urban Investment and Development's revenue is actually up 14% over the last year. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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. This free interactive report on Vanfund Urban Investment and Development's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Vanfund Urban Investment and Development shareholders are down 19% for the year, but the market itself is up 14%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Vanfund Urban Investment and Development 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.