Taking the occasional loss comes part and parcel with investing on the stock market. Anyone who held Zhejiang Huayou Cobalt Co., Ltd (SHSE:603799) over the last year knows what a loser feels like. The share price has slid 51% in that time. We note that it has not been easy for shareholders over three years, either; the share price is down 50% in that time. Furthermore, it's down 19% in about a quarter. That's not much fun for holders.

Since Zhejiang Huayou Cobalt has shed CN¥4.3b from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

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.

Unfortunately Zhejiang Huayou Cobalt reported an EPS drop of 15% for the last year. The share price decline of 51% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business. The less favorable sentiment is reflected in its current P/E ratio of 11.53.

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 Zhejiang Huayou Cobalt has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Zhejiang Huayou Cobalt's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 15% in the twelve months, Zhejiang Huayou Cobalt shareholders did even worse, losing 51% (even including dividends). However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 1.4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 4 warning signs for Zhejiang Huayou Cobalt (1 is significant!) that you should be aware of before investing here.

We will like Zhejiang Huayou Cobalt better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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.