Sinomach Automobile Co.,Ltd. (SHSE:600335) shareholders should be happy to see the share price up 12% in the last month. But that doesn't change the fact that the returns over the last year have been less than pleasing. In fact, the price has declined 14% in a year, falling short of the returns you could get by investing in an index fund.

While the stock has risen 5.2% in the past week but long term shareholders are still in the red, let's see what the fundamentals can tell us.

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Unfortunately Sinomach AutomobileLtd reported an EPS drop of 77% for the last year. This fall in the EPS is significantly worse than the 14% the share price fall. It may have been that the weak EPS was not as bad as some had feared. With a P/E ratio of 132.86, it's fair to say the market sees an EPS rebound on the cards.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Dive deeper into Sinomach AutomobileLtd's key metrics by checking this interactive graph of Sinomach AutomobileLtd's earnings, revenue and cash flow.

A Different Perspective

Sinomach AutomobileLtd shareholders are down 14% for the year (even including dividends), but the market itself is up 7.5%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 2%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 4 warning signs we've spotted with Sinomach AutomobileLtd (including 1 which is concerning) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.