Investing in stocks comes with the risk that the share price will fall. And unfortunately for Jiangsu Baichuan High-Tech New Materials Co., Ltd (SZSE:002455) shareholders, the stock is a lot lower today than it was a year ago. The share price is down a hefty 62% in that time. However, the longer term returns haven't been so bad, with the stock down 26% in the last three years. Furthermore, it's down 48% in about a quarter. That's not much fun for holders. Of course, this share price action may well have been influenced by the 21% decline in the broader market, throughout the period.

With the stock having lost 31% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

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 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.

During the last year Jiangsu Baichuan High-Tech New Materials saw its earnings per share drop below zero. While this may prove temporary, we'd consider it a negative, so it doesn't surprise us that the stock price is down. Of course, if the company can turn the situation around, investors will likely profit.

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

This free interactive report on Jiangsu Baichuan High-Tech New Materials' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 28% in the twelve months, Jiangsu Baichuan High-Tech New Materials shareholders did even worse, losing 62% (even including dividends). 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. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 3% over the last half decade. 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 Jiangsu Baichuan High-Tech New Materials better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Jiangsu Baichuan High-Tech New Materials .

We will like Jiangsu Baichuan High-Tech New Materials 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.