The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Suzhou Douson Drilling & Production Equipment Co.,Ltd. (SHSE:603800) share price has soared 185% in the last three years. Most would be happy with that. It's also up 17% in about a month. But the price may well have benefitted from a buoyant market, since stocks have gained 9.3% in the last thirty days.

The past week has proven to be lucrative for Suzhou Douson Drilling & Production EquipmentLtd investors, so let's see if fundamentals drove the company's three-year performance.

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Suzhou Douson Drilling & Production EquipmentLtd became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Suzhou Douson Drilling & Production EquipmentLtd has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Suzhou Douson Drilling & Production EquipmentLtd's financial health with this free report on its balance sheet.

A Different Perspective

Suzhou Douson Drilling & Production EquipmentLtd shareholders are down 13% over twelve months, which isn't far from the market return of -13%. The silver lining is that longer term investors would have made a total return of 13% per year over half a decade. If the stock price has been impacted by changing sentiment, rather than deteriorating business conditions, it could spell opportunity. It's always interesting to track share price performance over the longer term. But to understand Suzhou Douson Drilling & Production EquipmentLtd better, we need to consider many other factors. Take risks, for example - Suzhou Douson Drilling & Production EquipmentLtd has 2 warning signs we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.