Passive investing in an index fund is a good way to ensure your own returns roughly match the overall market. But if you buy individual stocks, you can do both better or worse than that. For example, the Mingyue Optical Lens Co.,Ltd. (SZSE:301101) share price is down 24% in the last year. That's well below the market decline of 10%. We wouldn't rush to judgement on Mingyue Optical LensLtd because we don't have a long term history to look at. In the last ninety days we've seen the share price slide 27%. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.

After losing 8.3% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Mingyue Optical LensLtd

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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.

Even though the Mingyue Optical LensLtd share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

The divergence between the EPS and the share price is quite notable, during the year. So it's well worth checking out some other metrics, too.

With a low yield of 0.6% we doubt that the dividend influences the share price much. Mingyue Optical LensLtd's revenue is actually up 19% over the last year. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

We know that Mingyue Optical LensLtd has improved its bottom line lately, but what does the future have in store? So it makes a lot of sense to check out what analysts think Mingyue Optical LensLtd will earn in the future (free profit forecasts).

A Different Perspective

Mingyue Optical LensLtd shareholders are down 23% for the year (even including dividends), even worse than the market loss of 10%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. It's worth noting that the last three months did the real damage, with a 27% decline. This probably signals that the business has recently disappointed shareholders - it will take time to win them back. 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. To that end, you should learn about the 2 warning signs we've spotted with Mingyue Optical LensLtd (including 1 which is a bit unpleasant) .

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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.