It's normal to be annoyed when stock you own has a declining share price. But often it is not a reflection of the fundamental business performance. So while the Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd. (SZSE:000060) share price is down 13% in the last year, the total return to shareholders (which includes dividends) was -11%. That's better than the market which declined 25% over the last year. However, the longer term returns haven't been so bad, with the stock down 3.2% in the last three years. The share price has dropped 16% in three months. But this could be related to the weak market, which is down 15% in the same period.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Unhappily, Shenzhen Zhongjin Lingnan Nonfemet had to report a 28% decline in EPS over the last year. The share price fall of 13% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Shenzhen Zhongjin Lingnan Nonfemet's key metrics by checking this interactive graph of Shenzhen Zhongjin Lingnan Nonfemet's earnings, revenue and cash flow.

A Different Perspective

Although it hurts that Shenzhen Zhongjin Lingnan Nonfemet returned a loss of 11% in the last twelve months, the broader market was actually worse, returning a loss of 25%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 1.0% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Zhongjin Lingnan Nonfemet better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shenzhen Zhongjin Lingnan Nonfemet (of which 1 doesn't sit too well with us!) you should know about.

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.