If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But long term Dian Diagnostics Group Co.,Ltd. (SZSE:300244) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 63% in that time. And over the last year the share price fell 48%, so we doubt many shareholders are delighted. The falls have accelerated recently, with the share price down 17% in the last three months. Of course, this share price action may well have been influenced by the 13% decline in the broader market, throughout the period.

Given the past week has been tough on shareholders, let's investigate the fundamentals and see what we can learn.

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 three years that the share price fell, Dian Diagnostics GroupLtd's earnings per share (EPS) dropped by 47% each year. This fall in the EPS is worse than the 28% compound annual share price fall. 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.

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 Dian Diagnostics GroupLtd's earnings, revenue and cash flow.

A Different Perspective

While the broader market lost about 15% in the twelve months, Dian Diagnostics GroupLtd shareholders did even worse, losing 47% (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 8% per year over five years. 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 Dian Diagnostics GroupLtd better, we need to consider many other factors. Take risks, for example - Dian Diagnostics GroupLtd has 1 warning sign 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.