The one-year shareholder returns and company earnings persist lower as Shanghai Flyco Electrical Appliance (SHSE:603868) stock falls a further 7.7% in past week

It's easy to match the overall market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Shanghai Flyco Electrical Appliance Co., Ltd. (SHSE:603868) shareholders over the last year, as the share price declined 32%. That's disappointing when you consider the market declined 9.1%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 4.6% in three years. Even worse, it's down 9.1% in about a month, which isn't fun at all.

Since Shanghai Flyco Electrical Appliance has shed CN¥1.7b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Shanghai Flyco Electrical Appliance

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unfortunately Shanghai Flyco Electrical Appliance reported an EPS drop of 3.7% for the last year. This reduction in EPS is not as bad as the 32% share price fall. So it seems the market was too confident about the business, a year ago.

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

Dive deeper into Shanghai Flyco Electrical Appliance's key metrics by checking this interactive graph of Shanghai Flyco Electrical Appliance's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Shanghai Flyco Electrical Appliance, it has a TSR of -27% for the last 1 year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

While the broader market lost about 9.1% in the twelve months, Shanghai Flyco Electrical Appliance shareholders did even worse, losing 27% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 7%, each year, over five years. 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. It's always interesting to track share price performance over the longer term. But to understand Shanghai Flyco Electrical Appliance better, we need to consider many other factors. For example, we've discovered 1 warning sign for Shanghai Flyco Electrical Appliance that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.