Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. For example, the Nanjing Canatal Data-Centre Environmental Tech Co., Ltd (SHSE:603912) share price is down 15% in the last year. That falls noticeably short of the market return of around 6.1%. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 0.9% in three years. The last week also saw the share price slip down another 17%. However, this move may have been influenced by the broader market, which fell 7.1% in that time.

With the stock having lost 17% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unhappily, Nanjing Canatal Data-Centre Environmental Tech had to report a 50% decline in EPS over the last year. The share price fall of 15% isn't as bad as the reduction in earnings per share. It may have been that the weak EPS was not as bad as some had feared. With a P/E ratio of 143.24, it's fair to say the market sees an EPS rebound on the cards.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Nanjing Canatal Data-Centre Environmental Tech's key metrics by checking this interactive graph of Nanjing Canatal Data-Centre Environmental Tech's earnings, revenue and cash flow.

A Different Perspective

Nanjing Canatal Data-Centre Environmental Tech shareholders are down 14% for the year (even including dividends), but the market itself is up 6.1%. 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 0.9% 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. 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. To that end, you should learn about the 3 warning signs we've spotted with Nanjing Canatal Data-Centre Environmental Tech (including 2 which shouldn't be ignored) .

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.