Fujian Zhangzhou Development Co.,LTD. (SZSE:000753) shareholders should be happy to see the share price up 23% in the last month. But in truth the last year hasn't been good for the share price. In fact, the price has declined 27% in a year, falling short of the returns you could get by investing in an index fund.

The recent uptick of 20% 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 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.

During the unfortunate twelve months during which the Fujian Zhangzhou DevelopmentLTD share price fell, it actually saw its earnings per share (EPS) improve by 71%. Of course, the situation might betray previous over-optimism about growth.

It's surprising to see the share price fall so much, despite the improved EPS. So it's easy to justify a look at some other metrics.

With a low yield of 0.8% we doubt that the dividend influences the share price much. Fujian Zhangzhou DevelopmentLTD managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

Fujian Zhangzhou DevelopmentLTD shareholders are down 26% for the year (even including dividends), but the market itself is up 3.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 3% 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 Fujian Zhangzhou DevelopmentLTD better, we need to consider many other factors. Even so, be aware that Fujian Zhangzhou DevelopmentLTD is showing 3 warning signs in our investment analysis , and 2 of those shouldn't be ignored...

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.