Shenzhen Everwin Precision Technology (SZSE:300115) earnings and shareholder returns have been trending downwards for the last three years, but the stock ascends 8.3% this past week

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But in any given year a good portion of stocks will fall short of that. Unfortunately, that's been the case for longer term Shenzhen Everwin Precision Technology Co., Ltd. (SZSE:300115) shareholders, since the share price is down 28% in the last three years, less than the market decline of around 24%. But it's up 8.3% in the last week. Less than a week ago Shenzhen Everwin Precision Technology announced its financial results; you can catch up on the most recent data by reading our company report.

On a more encouraging note the company has added CN¥1.2b to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

Check out our latest analysis for Shenzhen Everwin Precision Technology

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...' 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.

During the three years that the share price fell, Shenzhen Everwin Precision Technology's earnings per share (EPS) dropped by 2.3% each year. The share price decline of 10% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

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

We know that Shenzhen Everwin Precision Technology has improved its bottom line lately, but is it going to grow revenue? This free report showing analyst revenue forecasts should help you figure out if the EPS growth can be sustained.

A Different Perspective

We're pleased to report that Shenzhen Everwin Precision Technology shareholders have received a total shareholder return of 17% over one year. There's no doubt those recent returns are much better than the TSR loss of 1.1% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Shenzhen Everwin Precision Technology has 3 warning signs we think you should be aware of.

But note: Shenzhen Everwin Precision Technology 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.

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.