Jiangsu Ankura Smart Transmission Engineering Technology Co.Ltd (SZSE:300617) shareholders might be concerned after seeing the share price drop 22% in the last quarter. But that scarcely detracts from the really solid long term returns generated by the company over five years. In fact, the share price is 114% higher today. Generally speaking the long term returns will give you a better idea of business quality than short periods can. Only time will tell if there is still too much optimism currently reflected in the share price. Unfortunately not all shareholders will have held it for five years, so spare a thought for those caught in the 32% decline over the last three years: that's a long time to wait for profits.
Although Jiangsu Ankura Smart Transmission Engineering TechnologyLtd has shed CN¥384m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
See our latest analysis for Jiangsu Ankura Smart Transmission Engineering TechnologyLtd
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 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.
Over half a decade, Jiangsu Ankura Smart Transmission Engineering TechnologyLtd managed to grow its earnings per share at 9.1% a year. This EPS growth is lower than the 16% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
Dive deeper into Jiangsu Ankura Smart Transmission Engineering TechnologyLtd's key metrics by checking this interactive graph of Jiangsu Ankura Smart Transmission Engineering TechnologyLtd's earnings, revenue and cash flow.
What About The Total Shareholder Return (TSR)?
Investors should note that there's a difference between Jiangsu Ankura Smart Transmission Engineering TechnologyLtd's total shareholder return (TSR) and its share price change, which we've covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Jiangsu Ankura Smart Transmission Engineering TechnologyLtd's TSR of 127% for the 5 years exceeded its share price return, because it has paid dividends.
A Different Perspective
While the broader market lost about 4.8% in the twelve months, Jiangsu Ankura Smart Transmission Engineering TechnologyLtd shareholders did even worse, losing 16%. 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. On the bright side, long term shareholders have made money, with a gain of 18% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Jiangsu Ankura Smart Transmission Engineering TechnologyLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Jiangsu Ankura Smart Transmission Engineering TechnologyLtd that you should be aware of.
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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.