Jiangsu Liance Electromechanical Technology Co., Ltd. (SHSE:688113) shareholders will doubtless be very grateful to see the share price up 31% in the last week. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact, the price has declined 20% in a year, falling short of the returns you could get by investing in an index fund.

On a more encouraging note the company has added CN¥731m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

View our latest analysis for Jiangsu Liance Electromechanical Technology

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 Jiangsu Liance Electromechanical Technology reported an EPS drop of 19% for the last year. We note that the 20% share price drop is very close to the EPS drop. Therefore one could posit that the market has not become more concerned about the company, despite the lower EPS. Rather, the share price has approximately tracked EPS growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Jiangsu Liance Electromechanical Technology's key metrics by checking this interactive graph of Jiangsu Liance Electromechanical Technology's earnings, revenue and cash flow.

A Different Perspective

Jiangsu Liance Electromechanical Technology shareholders are down 20% for the year (even including dividends), even worse than the market loss of 14%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 7.5%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. 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 instance, we've identified 1 warning sign for Jiangsu Liance Electromechanical Technology that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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