The one-year shareholder returns and company earnings persist lower as Suzhou Dongshan Precision Manufacturing (SZSE:002384) stock falls a further 3.8% in past week

It's easy to match the overall market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by Suzhou Dongshan Precision Manufacturing Co., Ltd. (SZSE:002384) shareholders over the last year, as the share price declined 36%. That's disappointing when you consider the market declined 12%. However, the longer term returns haven't been so bad, with the stock down 17% in the last three years.

If the past week is anything to go by, investor sentiment for Suzhou Dongshan Precision Manufacturing isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

Check out our latest analysis for Suzhou Dongshan Precision Manufacturing

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.

Unhappily, Suzhou Dongshan Precision Manufacturing had to report a 29% decline in EPS over the last year. The share price decline of 36% is actually more than the EPS drop. So it seems the market was too confident about the business, a year ago.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market lost about 12% in the twelve months, Suzhou Dongshan Precision Manufacturing shareholders did even worse, losing 35% (even including dividends). 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. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. 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 Suzhou Dongshan Precision Manufacturing better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Suzhou Dongshan Precision Manufacturing .

But note: Suzhou Dongshan Precision Manufacturing may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.