It's easy to feel disappointed if you buy a stock that goes down. But sometimes broader market conditions have more of an impact on prices than the actual business performance. The CIMC Vehicles (Group) Co., Ltd. (HKG:1839) is down 25% over a year, but the total shareholder return is -17% once you include the dividend. And that total return actually beats the market decline of 20%. However, the longer term returns haven't been so bad, with the stock down 16% in the last three years.

With the stock having lost 6.1% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for CIMC Vehicles (Group)

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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).

Unfortunately CIMC Vehicles (Group) reported an EPS drop of 37% for the last year. This fall in the EPS is significantly worse than the 25% the share price fall. So despite the weak per-share profits, some investors are probably relieved the situation wasn't more difficult.

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

This free interactive report on CIMC Vehicles (Group)'s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, CIMC Vehicles (Group)'s TSR for the last 1 year was -17%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

CIMC Vehicles (Group) shareholders may not have made money over the last year, but their total loss of 17% ( including dividends) isn't as bad as the market loss of around 17%. Shareholders who have held for three years might be relatively sanguine about the recent weakness, given they have made 0.6% per year for three years. Given the three year returns are better than the return over the last year, it might be that the broader market has weighed on the stock recently. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with CIMC Vehicles (Group) (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

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 HK 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.