In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. We regret to report that long term Shenzhen Yitoa Intelligent Control Co.,Ltd. (SZSE:300131) shareholders have had that experience, with the share price dropping 38% in three years, versus a market decline of about 25%. Even worse, it's down 13% in about a month, which isn't fun at all. But this could be related to poor market conditions -- stocks are down 5.4% in the same time.

With the stock having lost 5.7% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for Shenzhen Yitoa Intelligent ControlLtd

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.

Shenzhen Yitoa Intelligent ControlLtd saw its EPS decline at a compound rate of 34% per year, over the last three years. This fall in the EPS is worse than the 15% compound annual share price fall. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in. With a P/E ratio of 110.26, it's fair to say the market sees a brighter future for the business.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Shenzhen Yitoa Intelligent ControlLtd's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Shenzhen Yitoa Intelligent ControlLtd shareholders have received a total shareholder return of 3.3% over one year. That gain is better than the annual TSR over five years, which is 2%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Yitoa Intelligent ControlLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Shenzhen Yitoa Intelligent ControlLtd that you should be aware of.

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.