Investors in Zhejiang Hisun Pharmaceutical (SHSE:600267) from five years ago are still down 35%, even after 6.3% gain this past week

The main aim of stock picking is to find the market-beating stocks. But even the best stock picker will only win with some selections. So we wouldn't blame long term Zhejiang Hisun Pharmaceutical Co., Ltd. (SHSE:600267) shareholders for doubting their decision to hold, with the stock down 37% over a half decade.

On a more encouraging note the company has added CN¥631m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

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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.

In the last half decade Zhejiang Hisun Pharmaceutical saw its share price fall as its EPS declined below zero. The recent extraordinary items contributed to this situation. Since the company has fallen to a loss making position, it's hard to compare the change in EPS with the share price change. But we would generally expect a lower price, given the situation.

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

It might be well worthwhile taking a look at our free report on Zhejiang Hisun Pharmaceutical's earnings, revenue and cash flow.

A Different Perspective

Zhejiang Hisun Pharmaceutical shareholders have received returns of 14% over twelve months, which isn't far from the general market return. The silver lining is that the share price is up in the short term, which flies in the face of the annualised loss of 6% over the last five years. While 'turnarounds seldom turn' there are green shoots for Zhejiang Hisun Pharmaceutical. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

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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.