Hangzhou Oxygen Plant GroupLtd's (SZSE:002430) investors will be pleased with their strong 110% return over the last five years

Hangzhou Oxygen Plant Group Co.,Ltd. (SZSE:002430) shareholders have seen the share price descend 11% over the month. Looking further back, the stock has generated good profits over five years. After all, the share price is up a market-beating 90% in that time. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 21% drop, in the last year.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for Hangzhou Oxygen Plant GroupLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Over half a decade, Hangzhou Oxygen Plant GroupLtd managed to grow its earnings per share at 6.8% a year. This EPS growth is lower than the 14% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

We know that Hangzhou Oxygen Plant GroupLtd has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Hangzhou Oxygen Plant GroupLtd's total shareholder return (TSR) and its 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. Hangzhou Oxygen Plant GroupLtd's TSR of 110% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Hangzhou Oxygen Plant GroupLtd shareholders are down 19% for the year, but the market itself is up 11%. 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 16% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Is Hangzhou Oxygen Plant GroupLtd cheap compared to other companies? These 3 valuation measures might help you decide.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.