Leshan Electric PowerLtd's (SHSE:600644) three-year decline in earnings translates into losses for shareholders

Leshan Electric Power Co.,Ltd (SHSE:600644) shareholders should be happy to see the share price up 17% in the last month. But we must note it seems the three year returns are less impressive. To be specific, the share price is a full 23% lower, while the market is down , with a return of (-21%)..

Although the past week has been more reassuring for shareholders, they're still in the red over the last three years, so let's see if the underlying business has been responsible for the decline.

View our latest analysis for Leshan Electric PowerLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

Leshan Electric PowerLtd became profitable within the last five years. We would usually expect to see the share price rise as a result. So it's worth looking at other metrics to try to understand the share price move.

We note that, in three years, revenue has actually grown at a 6.8% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating Leshan Electric PowerLtd further; while we may be missing something on this analysis, there might also be an opportunity.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Although it hurts that Leshan Electric PowerLtd returned a loss of 5.0% in the last twelve months, the broader market was actually worse, returning a loss of 6.0%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 1.6% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand Leshan Electric PowerLtd better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Leshan Electric PowerLtd (including 1 which shouldn't be ignored) .

Of course Leshan Electric PowerLtd 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.