Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by China Youran Dairy Group Limited (HKG:9858) shareholders over the last year, as the share price declined 35%. That's disappointing when you consider the market declined 15%. We wouldn't rush to judgement on China Youran Dairy Group because we don't have a long term history to look at. Unfortunately the share price momentum is still quite negative, with prices down 11% in thirty days. We do note, however, that the broader market is down 7.6% in that period, and this may have weighed on the share price.

With the stock having lost 5.3% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for China Youran Dairy Group

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Even though the China Youran Dairy Group share price is down over the year, its EPS actually improved. It's quite possible that growth expectations may have been unreasonable in the past.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.

China Youran Dairy Group managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling China Youran Dairy Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We doubt China Youran Dairy Group shareholders are happy with the loss of 35% over twelve months. That falls short of the market, which lost 15%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. With the stock down 10% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. It's always interesting to track share price performance over the longer term. But to understand China Youran Dairy Group better, we need to consider many other factors. Take risks, for example - China Youran Dairy Group has 2 warning signs we think you should be aware of.

But note: China Youran Dairy Group may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.