The three-year shareholder returns and company earnings persist lower as Baoji Titanium Industry (SHSE:600456) stock falls a further 3.2% in past week

The truth is that if you invest for long enough, you're going to end up with some losing stocks. But long term Baoji Titanium Industry Co., Ltd. (SHSE:600456) shareholders have had a particularly rough ride in the last three year. So they might be feeling emotional about the 60% share price collapse, in that time.

With the stock having lost 3.2% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for Baoji Titanium Industry

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 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 three years that the share price fell, Baoji Titanium Industry's earnings per share (EPS) dropped by 6.1% each year. This reduction in EPS is slower than the 26% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized 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 Baoji Titanium Industry's earnings, revenue and cash flow.

A Different Perspective

Baoji Titanium Industry shareholders are down 9.7% for the year (even including dividends), but the market itself is up 10%. 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 3% 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. For example, we've discovered 2 warning signs for Baoji Titanium Industry that you should be aware of before investing here.

We will like Baoji Titanium Industry better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.