Over the last month the Shandong Ruyi Woolen Garment Group Co., Ltd. (SZSE:002193) has been much stronger than before, rebounding by 44%. But over the last half decade, the stock has not performed well. You would have done a lot better buying an index fund, since the stock has dropped 47% in that half decade.

On a more encouraging note the company has added CN¥539m to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

See our latest analysis for Shandong Ruyi Woolen Garment Group

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, Shandong Ruyi Woolen Garment Group moved from a loss to profitability. That would generally be considered a positive, so we are surprised to see the share price is down. Other metrics may better explain the share price move.

We don't think that the 0.1% is big factor in the share price, since it's quite small, as dividends go. Arguably, the revenue drop of 14% a year for half a decade suggests that the company can't grow in the long term. That could explain the weak share price.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Shandong Ruyi Woolen Garment Group's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Shandong Ruyi Woolen Garment Group shareholders have received a total shareholder return of 39% over one year. And that does include the dividend. That certainly beats the loss of about 8% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Shandong Ruyi Woolen Garment Group better, we need to consider many other factors. Take risks, for example - Shandong Ruyi Woolen Garment Group has 4 warning signs (and 2 which are potentially serious) we think you should know about.

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 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.