North Electro-Optic Co.,Ltd. (SHSE:600184) shareholders should be happy to see the share price up 11% in the last week. But that doesn't change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 30% in one year, under-performing the market.

The recent uptick of 11% could be a positive sign of things to come, so let's take a look at historical fundamentals.

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 unfortunate twelve months during which the North Electro-OpticLtd share price fell, it actually saw its earnings per share (EPS) improve by 9.6%. Of course, the situation might betray previous over-optimism about growth.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's easy to justify a look at some other metrics.

Given the yield is quite low, at 0.6%, we doubt the dividend can shed much light on the share price. On the other hand, we're certainly perturbed by the 9.2% decline in North Electro-OpticLtd's revenue. If the market sees the weak revenue as jeopardising EPS, that could explain the lower share price.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at North Electro-OpticLtd's financial health with this free report on its balance sheet.

A Different Perspective

While the broader market lost about 18% in the twelve months, North Electro-OpticLtd shareholders did even worse, losing 30% (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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 4% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand North Electro-OpticLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for North Electro-OpticLtd you should know about.

For those who like to find winning investments this free list of undervalued 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com