Investors are understandably disappointed when a stock they own declines in value. But no-one can make money on every call, especially in a declining market. The China Nonferrous Metal Industry's Foreign Engineering and Construction Co.,Ltd. (SZSE:000758) share price is down 22% in the last three years. The silver lining to that cloud is that this return is superior to the average market decline of 24%. The falls have accelerated recently, with the share price down 13% in the last three months.

The recent uptick of 8.1% could be a positive sign of things to come, so let's take a look at historical fundamentals.

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 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).

Although the share price is down over three years, China Nonferrous Metal Industry's Foreign Engineering and ConstructionLtd actually managed to grow EPS by 78% per year in that time. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Or else the company was over-hyped in the past, and so its growth has disappointed.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

We note that, in three years, revenue has actually grown at a 15% annual rate, so that doesn't seem to be a reason to sell shares. It's probably worth investigating China Nonferrous Metal Industry's Foreign Engineering and ConstructionLtd further; while we may be missing something on this analysis, there might also be an opportunity.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Although it hurts that China Nonferrous Metal Industry's Foreign Engineering and ConstructionLtd returned a loss of 7.9% in the last twelve months, the broader market was actually worse, returning a loss of 10%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 0.1% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. Is China Nonferrous Metal Industry's Foreign Engineering and ConstructionLtd cheap compared to other companies? These 3 valuation measures might help you decide.

But note: China Nonferrous Metal Industry's Foreign Engineering and ConstructionLtd may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.