China Traditional Chinese Medicine Holdings (HKG:570) earnings and shareholder returns have been trending downwards for the last five years, but the stock pops 25% this past week

China Traditional Chinese Medicine Holdings Co. Limited (HKG:570) shareholders will doubtless be very grateful to see the share price up 44% in the last month. But over the last half decade, the stock has not performed well. You would have done a lot better buying an index fund, since the stock has dropped 18% in that half decade.

The recent uptick of 25% could be a positive sign of things to come, so let's take a look at historical fundamentals.

Check out our latest analysis for China Traditional Chinese Medicine Holdings

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.

During the five years over which the share price declined, China Traditional Chinese Medicine Holdings' earnings per share (EPS) dropped by 8.9% each year. This fall in the EPS is worse than the 4% compound annual share price fall. So investors might expect EPS to bounce back -- or they may have previously foreseen the EPS decline.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on China Traditional Chinese Medicine Holdings' earnings, revenue and cash flow.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. As it happens, China Traditional Chinese Medicine Holdings' TSR for the last 5 years was -9.9%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that China Traditional Chinese Medicine Holdings shareholders have received a total shareholder return of 4.8% over the last year. That's including the dividend. There's no doubt those recent returns are much better than the TSR loss of 1.9% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand China Traditional Chinese Medicine Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for China Traditional Chinese Medicine Holdings that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong 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.