Sichuan Huiyuan Optical Communication (SZSE:000586) shareholder returns have been respectable, earning 33% in 3 years

By buying an index fund, investors can approximate the average market return. But if you pick the right individual stocks, you could make more than that. For example, the Sichuan Huiyuan Optical Communication Co., Ltd. (SZSE:000586) share price is up 33% in the last three years, clearly besting the market decline of around 18% (not including dividends).

Since it's been a strong week for Sichuan Huiyuan Optical Communication shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for Sichuan Huiyuan Optical Communication

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last three years, Sichuan Huiyuan Optical Communication failed to grow earnings per share, which fell 50% (annualized).

Thus, it seems unlikely that the market is focussed on EPS growth at the moment. Therefore, we think it's worth considering other metrics as well.

The revenue drop of 0.9% is as underwhelming as some politicians. The only thing that's clear is there is low correlation between Sichuan Huiyuan Optical Communication's share price and its historic fundamental data. Further research may be required!

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Sichuan Huiyuan Optical Communication's financial health with this free report on its balance sheet.

A Different Perspective

Sichuan Huiyuan Optical Communication shareholders are down 8.4% for the year, but the market itself is up 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 3% 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. It's always interesting to track share price performance over the longer term. But to understand Sichuan Huiyuan Optical Communication better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Sichuan Huiyuan Optical Communication you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.