This week we saw the Shenzhen Huakong Seg Co., Ltd. (SZSE:000068) share price climb by 22%. But over the last half decade, the stock has not performed well. You would have done a lot better buying an index fund, since the stock has dropped 41% in that half decade.

On a more encouraging note the company has added CN¥564m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During five years of share price growth, Shenzhen Huakong Seg moved from a loss to profitability. Most would consider that to be a good thing, so it's counter-intuitive to see the share price declining. Other metrics might give us a better handle on how its value is changing over time.

Revenue is actually up 35% over the time period. A more detailed examination of the revenue and earnings may or may not explain why the share price languishes; there could be an opportunity.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Shenzhen Huakong Seg's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Shenzhen Huakong Seg shareholders are down 14% over twelve months, which isn't far from the market return of -16%. So last year was actually even worse than the last five years, which cost shareholders 7% per year. Weak performance over the long term usually destroys market confidence in a stock, but bargain hunters may want to take a closer look for signs of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Shenzhen Huakong Seg better, we need to consider many other factors. Take risks, for example - Shenzhen Huakong Seg has 3 warning signs we think you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.