It hasn't been the best quarter for Keshun Waterproof Technology Co.,Ltd. (SZSE:300737) shareholders, since the share price has fallen 29% in that time. But over three years, the returns would have left most investors smiling To wit, the share price did better than an index fund, climbing 97% during that period.

In light of the stock dropping 4.2% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive three-year return.

Check out our latest analysis for Keshun Waterproof TechnologyLtd

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, Keshun Waterproof TechnologyLtd achieved compound earnings per share growth of 40% per year. This EPS growth is higher than the 25% average annual increase in the share price. So it seems investors have become more cautious about the company, over time.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It is of course excellent to see how Keshun Waterproof TechnologyLtd has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Keshun Waterproof TechnologyLtd's financial health with this free report on its balance sheet.

A Different Perspective

Keshun Waterproof TechnologyLtd shareholders are down 44% for the year, falling short of the market return. Meanwhile, the broader market slid about 13%, likely weighing on the stock. Fortunately the longer term story is brighter, with total returns averaging about 26% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. 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 Keshun Waterproof TechnologyLtd (including 1 which is a bit concerning) .

If you are like me, then you will not want to miss this free list of growing companies 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 CN 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.