Nanjing Hanrui Cobalt Co.,Ltd. (SZSE:300618) shareholders will doubtless be very grateful to see the share price up 71% in the last quarter. But that is small recompense for the exasperating returns over three years. Tragically, the share price declined 58% in that time. So the improvement may be a real relief to some. The rise has some hopeful, but turnarounds are often precarious.

With the stock having lost 4.5% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

Nanjing Hanrui CobaltLtd saw its EPS decline at a compound rate of 36% per year, over the last three years. In comparison the 25% compound annual share price decline isn't as bad as the EPS drop-off. So, despite the prior disappointment, shareholders must have some confidence the situation will improve, longer term. With a P/E ratio of 64.72, it's fair to say the market sees a brighter future for the business.

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 Nanjing Hanrui CobaltLtd's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Nanjing Hanrui CobaltLtd has rewarded shareholders with a total shareholder return of 33% in the last twelve months. Of course, that includes the dividend. That certainly beats the loss of about 8% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Nanjing Hanrui CobaltLtd better, we need to consider many other factors. Even so, be aware that Nanjing Hanrui CobaltLtd is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.