Chengdu Xuguang Electronics Co., Ltd. (SHSE:600353) shareholders have seen the share price descend 13% over the month. But in stark contrast, the returns over the last half decade have impressed. Indeed, the share price is up an impressive 138% in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. The more important question is whether the stock is too cheap or too expensive today. Unfortunately not all shareholders will have held it for the long term, so spare a thought for those caught in the 22% decline over the last twelve months.

Since the long term performance has been good but there's been a recent pullback of 7.8%, let's check if the fundamentals match the share price.

View our latest analysis for Chengdu Xuguang Electronics

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 five years of share price growth, Chengdu Xuguang Electronics achieved compound earnings per share (EPS) growth of 18% per year. This EPS growth is remarkably close to the 19% average annual increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. Rather, the share price has approximately tracked EPS growth.

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

We know that Chengdu Xuguang Electronics 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.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Chengdu Xuguang Electronics' total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Chengdu Xuguang Electronics shareholders, and that cash payout contributed to why its TSR of 144%, over the last 5 years, is better than the share price return.

A Different Perspective

We regret to report that Chengdu Xuguang Electronics shareholders are down 22% for the year. Unfortunately, that's worse than the broader market decline of 17%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 20% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Chengdu Xuguang Electronics better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Chengdu Xuguang Electronics .

Of course Chengdu Xuguang Electronics 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.