Further weakness as LONGi Green Energy Technology (SHSE:601012) drops 3.7% this week, taking three-year losses to 70%

While not a mind-blowing move, it is good to see that the LONGi Green Energy Technology Co., Ltd. (SHSE:601012) share price has gained 19% in the last three months. But the last three years have seen a terrible decline. In that time the share price has melted like a snowball in the desert, down 71%. So it's about time shareholders saw some gains. Only time will tell if the company can sustain the turnaround.

Since LONGi Green Energy Technology has shed CN¥4.7b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for LONGi Green Energy Technology

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 way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

LONGi Green Energy Technology saw its share price decline over the three years in which its EPS also dropped, falling to a loss. Due to the loss, it's not easy to use EPS as a reliable guide to the business. But it's safe to say we'd generally expect the share price to be lower as a result!

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

It might be well worthwhile taking a look at our free report on LONGi Green Energy Technology's earnings, revenue and cash flow.

A Different Perspective

Investors in LONGi Green Energy Technology had a tough year, with a total loss of 23% (including dividends), against a market gain of about 12%. 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 6% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with LONGi Green Energy Technology .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

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

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.