For many, the main point of investing is to generate higher returns than the overall market. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in Guizhou Taiyong-Changzheng Technology Co.,Ltd. (SZSE:002927), since the last five years saw the share price fall 23%. More recently, the share price has dropped a further 14% in a month. But this could be related to poor market conditions -- stocks are down 7.7% in the same time.

Since Guizhou Taiyong-Changzheng TechnologyLtd has shed CN¥377m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

See our latest analysis for Guizhou Taiyong-Changzheng TechnologyLtd

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

Looking back five years, both Guizhou Taiyong-Changzheng TechnologyLtd's share price and EPS declined; the latter at a rate of 2.1% per year. Readers should note that the share price has fallen faster than the EPS, at a rate of 5% per year, over the period. This implies that the market was previously too optimistic about the stock.

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

This free interactive report on Guizhou Taiyong-Changzheng TechnologyLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Guizhou Taiyong-Changzheng TechnologyLtd the TSR over the last 5 years was -19%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

While it's certainly disappointing to see that Guizhou Taiyong-Changzheng TechnologyLtd shares lost 8.2% throughout the year, that wasn't as bad as the market loss of 21%. Given the total loss of 4% per year over five years, it seems returns have deteriorated in the last twelve months. Whilst Baron Rothschild does tell the investor "buy when there's blood in the streets, even if the blood is your own", buyers would need to examine the data carefully to be comfortable that the business itself is sound. 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. Case in point: We've spotted 3 warning signs for Guizhou Taiyong-Changzheng TechnologyLtd you should be aware of.

Of course Guizhou Taiyong-Changzheng TechnologyLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese 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.