Many investors define successful investing as beating the market average over the long term. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Jiangsu Changbao Steeltube Co.,Ltd (SZSE:002478) shareholders, since the share price is down 37% in the last three years, falling well short of the market return of around 14%. Even worse, it's down 15% in about a month, which isn't fun at all. However, we note the price may have been impacted by the broader market, which is down 12% in the same time period.

If the past week is anything to go by, investor sentiment for Jiangsu Changbao SteeltubeLtd isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Jiangsu Changbao SteeltubeLtd

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.

Jiangsu Changbao SteeltubeLtd saw its EPS decline at a compound rate of 31% per year, over the last three years. In comparison the 14% compound annual share price decline isn't as bad as the EPS drop-off. This suggests that the market retains some optimism around long term earnings stability, despite past EPS declines.

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

We know that Jiangsu Changbao SteeltubeLtd has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. In the case of Jiangsu Changbao SteeltubeLtd, it has a TSR of -33% for the last 3 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

While it's never nice to take a loss, Jiangsu Changbao SteeltubeLtd shareholders can take comfort that , including dividends,their trailing twelve month loss of 2.4% wasn't as bad as the market loss of around 18%. Of far more concern is the 5% p.a. loss served to shareholders over the last five years. While the losses are slowing we doubt many shareholders are happy with the stock. 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. For instance, we've identified 2 warning signs for Jiangsu Changbao SteeltubeLtd (1 is significant) that you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.