If you love investing in stocks you're bound to buy some losers. But the long term shareholders of Winning Health Technology Group Co., Ltd. (SZSE:300253) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 54% drop in the share price over that period.

Since Winning Health Technology Group has shed CN¥811m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Winning Health Technology Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Winning Health Technology Group saw its EPS decline at a compound rate of 29% per year, over the last three years. In comparison the 23% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in. This positive sentiment is also reflected in the generous P/E ratio of 135.35.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It might be well worthwhile taking a look at our free report on Winning Health Technology Group's earnings, revenue and cash flow.

A Different Perspective

We regret to report that Winning Health Technology Group shareholders are down 12% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 5.2%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. 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. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Winning Health Technology Group you should be aware of.

We will like Winning Health Technology Group 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.