The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For example, the Do-Fluoride New Materials Co., Ltd. (SZSE:002407) share price has soared 236% in the last three years. Most would be happy with that. On top of that, the share price is up 37% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

Although Do-Fluoride New Materials has shed CN¥2.3b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Check out our latest analysis for Do-Fluoride New Materials

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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).

During three years of share price growth, Do-Fluoride New Materials achieved compound earnings per share growth of 352% per year. This EPS growth is higher than the 50% average annual increase in the share price. So it seems investors have become more cautious about the company, over time.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Do-Fluoride New Materials has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Do-Fluoride New Materials' total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Do-Fluoride New Materials shareholders, and that cash payout contributed to why its TSR of 240%, over the last 3 years, is better than the share price return.

A Different Perspective

It's good to see that Do-Fluoride New Materials has rewarded shareholders with a total shareholder return of 2.5% in the last twelve months. However, that falls short of the 15% TSR per annum it has made for shareholders, each year, over five years. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand Do-Fluoride New Materials better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Do-Fluoride New Materials (of which 2 shouldn't be ignored!) you should know about.

For those who like to find winning investments this free list of growing 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 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.