The truth is that if you invest for long enough, you're going to end up with some losing stocks. But the last three years have been particularly tough on longer term Shenghe Resources Holding Co., Ltd (SHSE:600392) shareholders. Unfortunately, they have held through a 58% decline in the share price in that time. The more recent news is of little comfort, with the share price down 56% in a year. Shareholders have had an even rougher run lately, with the share price down 32% in the last 90 days. However, one could argue that the price has been influenced by the general market, which is down 19% in the same timeframe.

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

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Shenghe Resources Holding became profitable within the last five years. That would generally be considered a positive, so we are surprised to see the share price is down. So it's worth looking at other metrics to try to understand the share price move.

The modest 1.4% dividend yield is unlikely to be guiding the market view of the stock. Revenue is actually up 30% over the three years, so the share price drop doesn't seem to hinge on revenue, either. It's probably worth investigating Shenghe Resources Holding further; while we may be missing something on this analysis, there might also be an opportunity.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Take a more thorough look at Shenghe Resources Holding's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Shenghe Resources Holding shareholders are down 56% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 26%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Shenghe Resources Holding better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Shenghe Resources Holding 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 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.