Investing in Tianshui Huatian Technology (SZSE:002185) a year ago would have delivered you a 61% gain

Tianshui Huatian Technology Co., Ltd. (SZSE:002185) shareholders might be concerned after seeing the share price drop 13% in the last quarter. But looking back over the last year, the returns have actually been rather pleasing! Looking at the full year, the company has easily bested an index fund by gaining 61%.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

View our latest analysis for Tianshui Huatian Technology

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.

During the last year Tianshui Huatian Technology grew its earnings per share (EPS) by 277%. This EPS growth is significantly higher than the 61% increase in the share price. So it seems like the market has cooled on Tianshui Huatian Technology, despite the growth. Interesting. Having said that, the market is still optimistic, given the P/E ratio of 72.86.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that Tianshui Huatian Technology has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

It's good to see that Tianshui Huatian Technology has rewarded shareholders with a total shareholder return of 61% in the last twelve months. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 2% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. For example, we've discovered 1 warning sign for Tianshui Huatian Technology that you should be aware of before investing here.

We will like Tianshui Huatian Technology better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.