Optimism around Pangang Group Vanadium & Titanium Resources (SZSE:000629) delivering new earnings growth may be shrinking as stock declines 3.8% this past week

It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Pangang Group Vanadium & Titanium Resources Co., Ltd. (SZSE:000629) have tasted that bitter downside in the last year, as the share price dropped 34%. That contrasts poorly with the market decline of 16%. On the other hand, the stock is actually up 12% over three years. Furthermore, it's down 15% in about a quarter. That's not much fun for holders.

If the past week is anything to go by, investor sentiment for Pangang Group Vanadium & Titanium Resources isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Pangang Group Vanadium & Titanium Resources

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Unfortunately Pangang Group Vanadium & Titanium Resources reported an EPS drop of 38% for the last year. This proportional reduction in earnings per share isn't far from the 34% decrease in the share price. Therefore one could posit that the market has not become more concerned about the company, despite the lower EPS. Instead, the change in the share price seems to reduction in earnings per share, alone.

The image below shows how EPS has 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. Dive deeper into the earnings by checking this interactive graph of Pangang Group Vanadium & Titanium Resources' earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 16% in the twelve months, Pangang Group Vanadium & Titanium Resources shareholders did even worse, losing 34%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Case in point: We've spotted 1 warning sign for Pangang Group Vanadium & Titanium Resources you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com