Jiangsu Pacific Quartz's (SHSE:603688) five-year total shareholder returns outpace the underlying earnings growth

When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of Jiangsu Pacific Quartz Co., Ltd (SHSE:603688) stock is up an impressive 179% over the last five years. It's also up 31% in about a month. But the price may well have benefitted from a buoyant market, since stocks have gained 24% in the last thirty days.

Since the long term performance has been good but there's been a recent pullback of 4.3%, let's check if the fundamentals match the share price.

Check out our latest analysis for Jiangsu Pacific Quartz

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Over half a decade, Jiangsu Pacific Quartz managed to grow its earnings per share at 75% a year. The EPS growth is more impressive than the yearly share price gain of 23% over the same period. Therefore, it seems the market has become relatively pessimistic about the company. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.42.

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

We know that Jiangsu Pacific Quartz has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Jiangsu Pacific Quartz stock, you should check out this FREE detailed report on its balance sheet.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Jiangsu Pacific Quartz's total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Jiangsu Pacific Quartz's TSR of 216% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Jiangsu Pacific Quartz shareholders are down 48% for the year, but the market itself is up 6.8%. 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 26% 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. It's always interesting to track share price performance over the longer term. But to understand Jiangsu Pacific Quartz better, we need to consider many other factors. For instance, we've identified 1 warning sign for Jiangsu Pacific Quartz that you should be aware of.

Of course Jiangsu Pacific Quartz may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.