Zhejiang Hisun Pharmaceutical (SHSE:600267) shareholders are up 6.9% this past week, but still in the red over the last three years

Many investors define successful investing as beating the market average over the long term. But if you try your hand at stock picking, you risk returning less than the market. We regret to report that long term Zhejiang Hisun Pharmaceutical Co., Ltd. (SHSE:600267) shareholders have had that experience, with the share price dropping 41% in three years, versus a market decline of about 26%. And over the last year the share price fell 31%, so we doubt many shareholders are delighted. In contrast, the stock price has popped 8.5% in the last thirty days.

The recent uptick of 6.9% could be a positive sign of things to come, so let's take a look at historical fundamentals.

View our latest analysis for Zhejiang Hisun Pharmaceutical

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 the three years that the share price declined, Zhejiang Hisun Pharmaceutical's earnings per share (EPS) dropped significantly, falling to a loss. This was, in part, due to extraordinary items impacting earnings. Due to the loss, it's not easy to use EPS as a reliable guide to the business. However, we can say we'd expect to see a falling share price in this scenario.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Zhejiang Hisun Pharmaceutical's key metrics by checking this interactive graph of Zhejiang Hisun Pharmaceutical's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 18% in the twelve months, Zhejiang Hisun Pharmaceutical shareholders did even worse, losing 31%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. 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. It's always interesting to track share price performance over the longer term. But to understand Zhejiang Hisun Pharmaceutical better, we need to consider many other factors. Take risks, for example - Zhejiang Hisun Pharmaceutical has 1 warning sign we think 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