For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Zhejiang Jiemei Electronic And Technology Co., Ltd. (SZSE:002859) shareholders, since the share price is down 45% in the last three years, falling well short of the market decline of around 27%. And the ride hasn't got any smoother in recent times over the last year, with the price 36% lower in that time. Shareholders have had an even rougher run lately, with the share price down 19% in the last 90 days. But this could be related to the weak market, which is down 13% in the same period.

If the past week is anything to go by, investor sentiment for Zhejiang Jiemei Electronic And Technology isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

Zhejiang Jiemei Electronic And Technology saw its EPS decline at a compound rate of 11% per year, over the last three years. This reduction in EPS is slower than the 18% annual reduction in the share price. 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 Zhejiang Jiemei Electronic And Technology has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Zhejiang Jiemei Electronic And Technology will grow revenue in the future.

A Different Perspective

While the broader market lost about 16% in the twelve months, Zhejiang Jiemei Electronic And Technology shareholders did even worse, losing 35% (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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 2% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Zhejiang Jiemei Electronic And Technology better, we need to consider many other factors. For example, we've discovered 2 warning signs for Zhejiang Jiemei Electronic And Technology (1 doesn't sit too well with us!) that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.