It's been a soft week for Anhui Xinbo Aluminum Co., Ltd. (SZSE:003038) shares, which are down 15%. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. In that time we've seen the stock easily surpass the market return, with a gain of 23%.

Since the long term performance has been good but there's been a recent pullback of 15%, let's check if the fundamentals match the share price.

Check out our latest analysis for Anhui Xinbo Aluminum

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 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.

During the last year Anhui Xinbo Aluminum grew its earnings per share (EPS) by 7.5%. This EPS growth is significantly lower than the 23% increase in the share price. So it's fair to assume the market has a higher opinion of the business than it a year ago. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 58.51.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It is of course excellent to see how Anhui Xinbo Aluminum has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Anhui Xinbo Aluminum's financial health with this free report on its balance sheet.

A Different Perspective

Anhui Xinbo Aluminum shareholders should be happy with the total gain of 24% over the last twelve months, including dividends. And the share price momentum remains respectable, with a gain of 20% in the last three months. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 4 warning signs for Anhui Xinbo Aluminum (2 are significant) that you should be aware of.

But note: Anhui Xinbo Aluminum 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 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.