We think intelligent long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. For example, after five long years the Dare Power Dekor Home Co.,Ltd. (SZSE:000910) share price is a whole 53% lower. That's an unpleasant experience for long term holders. Even worse, it's down 12% in about a month, which isn't fun at all.

Since Dare Power Dekor HomeLtd has shed CN¥487m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

Check out our latest analysis for Dare Power Dekor HomeLtd

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 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.

Looking back five years, both Dare Power Dekor HomeLtd's share price and EPS declined; the latter at a rate of 8.8% per year. This reduction in EPS is less than the 14% annual reduction in the share price. This implies that the market was previously too optimistic about the stock. The low P/E ratio of 11.30 further reflects this reticence.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Dare Power Dekor HomeLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Dare Power Dekor HomeLtd the TSR over the last 5 years was -51%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Dare Power Dekor HomeLtd shareholders are up 1.4% for the year (even including dividends). But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 9% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Dare Power Dekor HomeLtd better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Dare Power Dekor HomeLtd you should be aware of.

We will like Dare Power Dekor HomeLtd better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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.