The three-year returns for Heilongjiang Interchina Water TreatmentLtd's (SHSE:600187) shareholders have been , yet its earnings growth was even better

By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with prowess, you can make superior returns. For example, Heilongjiang Interchina Water Treatment Co.,Ltd (SHSE:600187) shareholders have seen the share price rise 12% over three years, well in excess of the market decline (31%, not including dividends).

The past week has proven to be lucrative for Heilongjiang Interchina Water TreatmentLtd investors, so let's see if fundamentals drove the company's three-year performance.

Check out our latest analysis for Heilongjiang Interchina Water TreatmentLtd

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

Heilongjiang Interchina Water TreatmentLtd became profitable within the last three years. So we would expect a higher share price over the period.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Heilongjiang Interchina Water TreatmentLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While it's certainly disappointing to see that Heilongjiang Interchina Water TreatmentLtd shares lost 12% throughout the year, that wasn't as bad as the market loss of 19%. Unfortunately, last year's performance may indicate unresolved challenges, given that it's worse than the annualised loss of 2% over the last half decade. Whilst Baron Rothschild does tell the investor "buy when there's blood in the streets, even if the blood is your own", buyers would need to examine the data carefully to be comfortable that the business itself is sound. It's always interesting to track share price performance over the longer term. But to understand Heilongjiang Interchina Water TreatmentLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for Heilongjiang Interchina Water TreatmentLtd (2 can't be ignored!) that you should be aware of before investing here.

But note: Heilongjiang Interchina Water TreatmentLtd 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.

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