Metallurgical Corporation of China (HKG:1618) shareholders have endured a 28% loss from investing in the stock a year ago

While not a mind-blowing move, it is good to see that the Metallurgical Corporation of China Ltd. (HKG:1618) share price has gained 14% in the last three months. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact the stock is down 31% in the last year, well below the market return.

Since shareholders are down over the longer term, lets look at the underlying fundamentals over the that time and see if they've been consistent with returns.

Check out our latest analysis for Metallurgical Corporation of China

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 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).

Unhappily, Metallurgical Corporation of China had to report a 25% decline in EPS over the last year. This proportional reduction in earnings per share isn't far from the 31% decrease in the share price. So it seems that the market sentiment has not changed much, despite the weak results. Instead, the change in the share price seems to reduction in earnings per share, alone.

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

Dive deeper into Metallurgical Corporation of China's key metrics by checking this interactive graph of Metallurgical Corporation of China's earnings, revenue and cash flow.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Metallurgical Corporation of China the TSR over the last 1 year was -28%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While the broader market lost about 9.2% in the twelve months, Metallurgical Corporation of China shareholders did even worse, losing 28% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 1.7% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Metallurgical Corporation of China better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Metallurgical Corporation of China .

We will like Metallurgical Corporation of China better if we see some big insider buys. While we wait, check out this free list of growing companies 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 Hong Kong exchanges.

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

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.