The five-year decline in earnings for Shenzhen Neptunus Interlong Bio-technique HKG:8329) isn't encouraging, but shareholders are still up 45% over that period

Ideally, your overall portfolio should beat the market average. But even the best stock picker will only win with some selections. So we wouldn't blame long term Shenzhen Neptunus Interlong Bio-technique Company Limited (HKG:8329) shareholders for doubting their decision to hold, with the stock down 20% over a half decade. And the share price decline continued over the last week, dropping some 54%.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Looking back five years, both Shenzhen Neptunus Interlong Bio-technique's share price and EPS declined; the latter at a rate of 16% per year. This fall in the EPS is worse than the 4% compound annual share price fall. The relatively muted share price reaction might be because the market expects the business to turn around.

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

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

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Shenzhen Neptunus Interlong Bio-technique's TSR for the last 5 years was 45%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We're pleased to report that Shenzhen Neptunus Interlong Bio-technique shareholders have received a total shareholder return of 94% over one year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 8%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Neptunus Interlong Bio-technique better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Shenzhen Neptunus Interlong Bio-technique (of which 2 are concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.