Optimism around Zhejiang Huace Film & TV (SZSE:300133) delivering new earnings growth may be shrinking as stock declines 4.0% this past week

You can invest in an index fund if you want to make sure your returns approximately match the overall market. But in any given year a good portion of stocks will fall short of that. For example, that's what happened with Zhejiang Huace Film & TV Co., Ltd. (SZSE:300133) over the last year - it's share price is down 18% versus a market decline of 17%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 8.4% in three years. It's down 19% in about a quarter.

After losing 4.0% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for Zhejiang Huace Film & TV

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.

Unfortunately Zhejiang Huace Film & TV reported an EPS drop of 37% for the last year. The share price fall of 18% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Zhejiang Huace Film & TV's key metrics by checking this interactive graph of Zhejiang Huace Film & TV's earnings, revenue and cash flow.

A Different Perspective

The total return of 18% received by Zhejiang Huace Film & TV shareholders over the last year isn't far from the market return of -17%. Unfortunately, last year's performance is a deterioration of an already poor long term track record, given the loss of 1.8% per year over the last five years. It will probably take a substantial improvement in the fundamental performance for the company to reverse this 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. Even so, be aware that Zhejiang Huace Film & TV is showing 3 warning signs in our investment analysis , you should know about...

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.

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