It hasn't been the best quarter for Zhejiang Dun'an Artificial Environment Co., Ltd (SZSE:002011) shareholders, since the share price has fallen 16% in that time. Looking further back, the stock has generated good profits over five years. Its return of 97% has certainly bested the market return!

In light of the stock dropping 3.7% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive five-year return.

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the five years of share price growth, Zhejiang Dun'an Artificial Environment moved from a loss to profitability. That's generally thought to be a genuine positive, so investors may expect to see an increasing share price.

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

It is of course excellent to see how Zhejiang Dun'an Artificial Environment has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Zhejiang Dun'an Artificial Environment stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While the broader market lost about 15% in the twelve months, Zhejiang Dun'an Artificial Environment shareholders did even worse, losing 19%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 15%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. Is Zhejiang Dun'an Artificial Environment cheap compared to other companies? These 3 valuation measures might help you decide.

But note: Zhejiang Dun'an Artificial Environment may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.