Investors can earn very close to the average market return by buying an index fund. But in any given year a good portion of stocks will fall short of that. For example, the Wolong Resources Group Co., Ltd. (SHSE:600173) share price fell 28% in the last year, slightly below the market decline of around 26%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 6.6% in three years. Shareholders have had an even rougher run lately, with the share price down 26% in the last 90 days. But this could be related to the weak market, which is down 19% in the same period.

After losing 19% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Unhappily, Wolong Resources Group had to report a 58% decline in EPS over the last year. This fall in the EPS is significantly worse than the 28% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

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

It might be well worthwhile taking a look at our free report on Wolong Resources Group's earnings, revenue and cash flow.

A Different Perspective

Wolong Resources Group shareholders are down 27% over twelve months (even including dividends), which isn't far from the market return of -26%. The silver lining is that longer term investors would have made a total return of 1.8% per year over half a decade. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. It's always interesting to track share price performance over the longer term. But to understand Wolong Resources Group better, we need to consider many other factors. Take risks, for example - Wolong Resources Group has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.