Zhejiang Changhua Auto Parts Co., Ltd. (SHSE:605018) shareholders should be happy to see the share price up 15% in the last month. The stock is actually down over the last year. But at least it bettered the loss of 14% in its market.

The recent uptick of 6.9% could be a positive sign of things to come, so let's take a look at historical fundamentals.

See our latest analysis for Zhejiang Changhua Auto Parts

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 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).

Unhappily, Zhejiang Changhua Auto Parts had to report a 49% decline in EPS over the last year. The share price fall of 12% isn't as bad as the reduction in earnings per share. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult. With a P/E ratio of 52.06, it's fair to say the market sees an EPS rebound on the cards.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Zhejiang Changhua Auto Parts' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the broader market dropped 14% over the year, the fact that Zhejiang Changhua Auto Parts shareholders were down 9.8% isn't so bad. Things weren't so bad until the last three months, when the stock dropped 23%. The recent drop implies that investors are increasingly averse to the stock -- quite possibly due to a deterioration of the business. In times of uncertainty we usually try to focus on the long term fundamental business metrics. It's always interesting to track share price performance over the longer term. But to understand Zhejiang Changhua Auto Parts better, we need to consider many other factors. Case in point: We've spotted 5 warning signs for Zhejiang Changhua Auto Parts you should be aware of, and 3 of them don't sit too well with us.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.